Mixed reforms at SOEs to get impetus
China will accelerate mixed-ownership reforms at its centrally administered, State-owned enterprises through equity diversification and corporate governance changes, the country’s State asset regulator said on Tuesday.
The government is expecting these changes to not only introduce private investors, but also to improve their efficiency and competitiveness.
Supported by the various specialized capital operation platforms established by the government, banks and private capital, the country will intensify resource integration in areas like manufacturing, power, telecommunication, chemicals, coal, steel, offshore engineering and environmental protection in 2018.
Xiao Yaqing, chairman of the State-owned Assets Supervision and Administration Commission, said the government will select qualified SOEs to implement equity diversification at the group level, as well as to explore the governance mechanism and regulatory model that are different from the previous sole proprietorships owned by the government.
China’s centrally administered SOEs, supervised by the SASAC, on Monday reported double-digit growth in business revenues and profits in 2017. They gained a total of 1.4 trillion yuan ($216.8 billion) in profit, up 15.2 percent year-on-year. Total revenue of the centrally administered SOEs rose 13.3 percent year-on-year to 26.4 trillion yuan in 2017.
“The main tasks of the SASAC this year is to establish new pilot programs for mixed-ownership reform and cut down SOE debts,” said Xiao.
The SASAC said the series of reforms have reshaped the shareholding structure of SOEs, helped spin off non-core assets and encouraged innovation.
Reforms to promote mixed ownership in sectors such as civil aviation, power, oil, gas, militaryrelated industry and telecoms led to the injection of more than 90 billion yuan of private capital in 2017.
“The SOE reform will be expanded to the local level with practical solutions gained by centrally administered SOEs over the past two years, to resolve and prevent their debt risks, as well as to introduce flexible management methods and new equity systems to local SOEs,” said Li Jin, a researcher at the SOEs Reform and Development Center of Beijing-based Renmin University of China.