SOE revamp gathers pace
Reforms to be deepened this year to cover more industries as 2020-22 plan sees tasks completed at several firms
China plans to advance the strategic restructuring and professional integration of its State-owned enterprises in 2023, especially in the areas of medical and health care, equipment manufacturing and mineral resources, government officials and experts said.
The industries of product testing, coal and electricity will also be included in the government’s plan to further deepen the reform of the SOEs this year, according to the State-owned Assets Supervision and Administration Commission of the State Council.
The efforts are meant to help SOEs avoid duplication of investment and homogeneous competition in which companies offer the same products or services. It is also meant to help accelerate the growth of pioneers in modern industrial chains.
Meanwhile, China completed all the major tasks of its three-year plan for the reform of SOEs (2020-22), said Peng Huagang, secretary-general of the commission.
Driven by this trend, China Water Conservancy and Electricity International Co Ltd, a subsidiary of China Three Gorges Corp, was transferred to China Communications Construction Co Ltd in January.
Also, Power Construction Corp of China, known as PowerChina, transferred the ownership of its 30 affiliated hospitals and clinics to China General Technology (Group) Holding Co Ltd in January, a move in response to the government’s call to divest assets that are not within its main line of business.
“The work of ownership transfers will be completed within the first quarter of 2023,” said Ding Yanzhang, PowerChina’s board chairman.
A total of 37 centrally administered SOEs, including Sinosteel Group Corp Ltd, China Baowu Steel Group Corp, COFCO Corp and China Grain Reserves Group Ltd, conducted 25 professional integration activities in 2022.
The number of central SOEs has been reduced from 117 in 2012 to 98 this year via mergers and reorganizations, according to SASAC.
Promoting the strategic restructuring and specialized integration of central SOEs is a vital step in accelerating the optimization of the layout and structural adjustment of the Stateowned economy, said Weng Jieming, SASAC’s vice-chairman.
In addition to maintaining the stability of the industrial and supply chains in the country, these actions will accelerate the nurturing of worldclass enterprises with global competitiveness, Weng said.
“The policy is aimed at achieving economies of scale through innovative application of resource integration to enhance the quality and efficiency of SOE development,” said Zhou Lisha, a researcher with the Institute for State-owned Enterprises at Tsinghua University.
As a key meeting held in Beijing in early February, SASAC said that it would guide SOEs to develop strategic emerging industries and help build a modern industrial system with orderly links and high efficiency.
The government plans to accelerate the construction of world-class enterprises in all respects. It also plans to pursue outstanding products, prominent brands, advanced innovation and modern governance, while aiming for excellence by benchmarking, adopting category-based policies and focusing on concrete actions, the commission said in a statement after the meeting.
In terms of nurturing modern industrial chain pioneers, SASAC said that nearly 1 trillion yuan ($143.6 billion) had been invested by 16 central SOEs, including State Power Investment Corp, China Electronics Technology Group Corp and China Communications Construction Co Ltd. This was done to strengthen and supplement industrial chains in recent years. Over 90 percent of their goals for 2022 were fulfilled, officials said.
Dongfang Electric Corp, a Chengdubased energy and electromechanical equipment system manufacturer, as well as a central SOE, ignited China’s first self-developed F-class 50-megawatt heavy-duty gas turbine in Qingyuan, Guangdong province, in January. The turbine signifies a breakthrough for the country in the field of heavy gas turbines, and the ignition marked an important step toward its commercial operation.
Heavy-duty gas turbines are core equipment for power plants. The turbine connected to the grid within the past month, said Zhang Yanjun, the group’s vice-president.
The turbine can reduce carbon emissions by over 500,000 metric tons a year compared with thermal power generators. When operational, it can produce more than 70 megawatt-hours of electricity an hour in a combined cycle power generation system, meeting the needs of 7,000 households a day.
Chinese SOEs saw their operating revenue grow by 8.3 percent yearon-year to 82.6 trillion yuan in 2022, while their foreign trade value amounted to 6.77 trillion yuan, accounting for 16.1 percent of China’s foreign trade, the Ministry of Finance and the General Administration of Customs said recently.
CRRC Qingdao Sifang Co Ltd, a Shandong province-based subsidiary of China Railway Rolling Stock Corp, signed a contract with Etihad Rail — the developer and operator of the national rail network in the United Arab Emirates — to supply diesel multiple unit (DMU) passenger trains to the UAE. DMU trains have engines built into one or more of the rail cars
and require no separate locomotive.
They will be the first DMU passenger trains manufactured in China to be exported to the UAE and will bolster the passenger service of that country’s rail network.
The trains are planned to be manufactured with internationally advanced standards and technology, including the ability to operate in
hot and sandy conditions. They are expected to be the fastest DMU trains in the world, according to the Chinese train maker.
The trains will be put into use in 2025 and equipped with first-class seats, second-class seats and family areas, as well as air conditioning and Wi-Fi service, according to the company.