Mixed re­forms at SOEs to get im­pe­tus

China Daily European Weekly - - Business - By ZHONG NAN REN XIAO­JIN Con­tact the writ­ers at zhong­nan@chi­nadaily.com.cn

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 Jan 16.

The gov­ern­ment is ex­pect­ing these changes to not only in­tro­duce pri­vate in­vestors, but also to im­prove the en­ter­prises’ ef­fi­ciency and com­pet­i­tive­ness.

Sup­ported by var­i­ous spe­cial­ized cap­i­tal op­er­a­tion plat­forms es­tab­lished by the gov­ern­ment, banks and pri­vate cap­i­tal, the coun­try will in­ten­sify re­source in­te­gra­tion this year in such ar­eas as man­u­fac­tur­ing, power, telecom­mu­ni­ca­tion, chem­i­cals, coal, steel, off­shore engi­neer­ing and en­vi­ron­men­tal pro­tec­tion.

Xiao Yaqing, chair­man of the State-owned As­sets Su­per­vi­sion and Ad­min­is­tra­tion Com­mis­sion, says the gov­ern­ment will select qual­i­fied SOEs to im­ple­ment eq­uity di­ver­si­fi­ca­tion at the group level, as well as to ex­plore a gov­er­nance mech­a­nism and a reg­u­la­tory model that are dif­fer­ent from the pre­vi­ous sole pro­pri­etor­ships owned by the gov­ern­ment.

On Jan 15, China’s centrally ad­min­is­tered SOEs, su­per­vised by the SASAC, re­ported dou­ble-digit growth in busi­ness rev­enues and prof­its in 2017. They gained a to­tal of 1.4 tril­lion yuan ($216.8 bil­lion; 178 bil­lion eu­ros; £158 bil­lion) in profit, up by 15.2 per­cent year-onyear. To­tal rev­enue of the centrally ad­min­is­tered SOEs rose by 13.3 per­cent year-on-year to 26.4 tril­lion yuan in 2017.

“The main tasks of the SASAC this year are to es­tab­lish new pi­lot pro­grams for mixed-own­er­ship re­form and cut down SOE debts,” says Xiao.

The SASAC said the re­forms have re­shaped the share­hold­ing struc­ture of SOEs, helped spin off non­core 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 re­forms 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,” says Li Jin, a re­searcher at the SOEs Re­form and De­vel­op­ment Cen­ter of Ren­min Univer­sity of China in Bei­jing.

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