SOE profits may go to social needs
By Richard Fu |
April 4, 2011, Monday
|
Print Edition
Print Edition
Shanghai will have to first securitize its state-owned enterprises before proceeds from them can be allocated to make up the shortfall in the city's social security fund, according to its state asset regulator.
"The profits of SOEs should be shared with society, but first we need liquidity, and the securitization of assets can contribute to increasing liquidity," said Liu Xie, vice director and spokeswoman of the Shanghai State-owned Assets Supervision and Administration Commission, on Saturday.
Shanghai is studying the feasibility of using part of the proceeds from SOEs and sale of land plots to fill the gap in its pension fund. The gap means money currently paid into the fund by workers and companies is not enough to pay for pensions of retired people.
Shanghai Party Secretary Yu Zhengsheng said in January that the city was putting in more than 10 billion yuan (US$1.5 billion) a year from its fiscal revenue to cover the deficit - a practice deemed not sustainable as the city's aging population rises.
Shanghai will stick to its plan to reform its SOE sector by opening up markets and practising market-oriented restructuring, Liu told a briefing. Listed firms now undergoing restructuring include Shanghai Construction Group, which is acquiring more assets from its parent, and cosmetic maker Shanghai Jahwa, which plans to sell a big stake owned by the city government.
Securitization transforms SOEs into public corporations by selling shares. Shanghai targets to increase the asset securitization ratio in local government-owned state firms to 35 percent this year from 30.5 percent in 2010.
The local state asset commission also aims to have over 90 percent of the SOEs it supervises to complete a group listing or the listing of core assets by the end of 2015.
Local SOEs posted a combined profit of 13.1 billion yuan in the first two months of this year, an annual surge of 102 percent.
"The profits of SOEs should be shared with society, but first we need liquidity, and the securitization of assets can contribute to increasing liquidity," said Liu Xie, vice director and spokeswoman of the Shanghai State-owned Assets Supervision and Administration Commission, on Saturday.
Shanghai is studying the feasibility of using part of the proceeds from SOEs and sale of land plots to fill the gap in its pension fund. The gap means money currently paid into the fund by workers and companies is not enough to pay for pensions of retired people.
Shanghai Party Secretary Yu Zhengsheng said in January that the city was putting in more than 10 billion yuan (US$1.5 billion) a year from its fiscal revenue to cover the deficit - a practice deemed not sustainable as the city's aging population rises.
Shanghai will stick to its plan to reform its SOE sector by opening up markets and practising market-oriented restructuring, Liu told a briefing. Listed firms now undergoing restructuring include Shanghai Construction Group, which is acquiring more assets from its parent, and cosmetic maker Shanghai Jahwa, which plans to sell a big stake owned by the city government.
Securitization transforms SOEs into public corporations by selling shares. Shanghai targets to increase the asset securitization ratio in local government-owned state firms to 35 percent this year from 30.5 percent in 2010.
The local state asset commission also aims to have over 90 percent of the SOEs it supervises to complete a group listing or the listing of core assets by the end of 2015.
Local SOEs posted a combined profit of 13.1 billion yuan in the first two months of this year, an annual surge of 102 percent.
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