Over 20 localities set timetables for mixed-ownership reform

More than 20 provincial regions have rolled out their blueprints for public sector reforms in 2017, with mixedownership reform a highlight, media reported on Friday.

As of Tuesday, 28 provincial regions have convened the two annual sessions of their legislative and political consultative bodies, regarded as the warm-up for the national “two sessions” to be held in early March, said the Beijing-based Economic Information Daily.

The regions, which include Beijing, Tianjin and Shanghai, have clearly placed deepening of public sector reforms at the top of their agendas in 2017, with mixed-ownership reforms acting as a wedge, according to the daily. The provincial regions have formulated blueprints for their reforms in line with their specific economic requirements.

Many provinces have proposed further opening of sectors to private investors, including utilities, telecommunications, transportation, petroleum, natural gas and municipal public services. These sectors have previously been monopolized by State-owned enterprises (SOEs).

Meanwhile, some provinces have set out clear goals to speed up mergers and acquisitions among SOEs, and push forward either the overall listing of SOEs or the floating of their core businesses.

“Centrally administered SOEs are already on the move, and SOEs at the local level are also speeding up toward mergers and reorganizations. A wave of market-oriented reorganizations among SOEs is building up momentum,” Li Jin, head of the China Enterprise Research Institute, was quoted by the Economic Information Daily as saying.

Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology, said that the reform of SOEs into mixed-ownership structure mainly has two targets. “One is integrating existing capital, such as cutting excessive industrial capacity. The other is improving incremental capital, which is introducing more private capital into areas currently dominated by government capital.”

“In the past, SOEs and private companies usually didn’t get in each other’s way. In the future, private shareholding in SOEs should increase. Industries that were used to be monopolized by SOEs should also be more open to private companies,” Dong told the Global Times.

One good example of mixed-ownership [of both private and public capital] is the Shanghai-based SOE Greenland Group, where government capital only plays a supporting role in the company, Feng Liguo, an expert at the China Enterprise Confederation, told the Global Times. But he said that examples like Greenland are very rare in China.

Dong said that SOE reform is a long process. “We shouldn’t take things for granted or act with undue haste. Neither should we expect too much from the reforms,” he stressed.

There are 1,010 A-share companies owned by State-assets watchdogs, local governments, central SOEs, local SOEs, universities and collective ownership enterprises, accounting for more than one third of all listed A-share companies, according to the Economic Information Daily.