Regulator: Reform is gathering pace

Commission stresses progress in recast for mixed ownership of State firms

China’s State-owned enterprises or SOEs will deepen their reform for mixed ownership, the State-owned Assets Supervision and Administration Commission announced on Wednesday.

SOEs will also strengthen pilot projects for setting up companies for investment and management of State capital, so as to enhance SOEs’ vitality and performance, the commission said.

Reform of some SOEs for mixed ownership has made impressive progress of late. SOEs involved in the first two rounds of pilot projects have been implementing reforms as scheduled. Reform plans of some SOEs for the third round have been approved, but the list has not been released yet, the commission said.

Ten central SOEs have been selected for the pilot projects for restructuring and establishing new companies for investment and management of State capital.

The next round will see no fewer than 10 other SOEs taking part in the exercise, the commission said.

Local SOE regulators are encouraged to conduct the pilot work based on their specific circumstances, the national SOE regulator said.

“We must deepen SOE reforms and effectively establish modern corporate structures with Chinese characteristics in SOEs, to further enhance their efficiency and vitality,” said Weng Jieming, deputy head of the commission, at a media conference on Wednesday.

Mixed ownership is critical to deepening SOE reforms, so as to improve the efficiency of State-owned assets. The reform will be undertaken in key sectors through multiple channels, he said.

As part of the first two pilot projects for mixed ownership, subsidiaries of AVIC, China Gold and COFCO have accepted strategic investors and restructured their shareholding pattern. Now, some of these restructured subsidiaries are even considering initial public offerings, the commission said.

Central SOEs and their affiliates must try to meet their requirements for additional capital through stockmarket instruments and sales of asset ownership.

From January to July, central SOEs and their listed subsidiaries have raised about 61.88 billion yuan ($9 billion) from stock markets, according to the commission.

At the local level, SOEs have restructured and established 89 State-owned companies for investment and management of State capital. The pilot project will be scaled up this year.

The commission is mulling how to include more qualified central SOEs in the pilot project for forming such special-purpose investment vehicles, and would encourage local SOE regulators to follow up, Weng said.

Zhou Lisha, a researcher with the commission’s think tank, said about 50 SOEs have been engaged in three pilots for mixed-ownership reform. In the third round, more SOEs, including local firms, will be involved.