More state firms chosen for reform
Print Edition
CHINA has chosen 31 more state-owned enterprises to take part in its third round of mixed-ownership reforms aimed at injecting private capital into the state sector, the country’s top economic planning agency said yesterday.
Mixed-ownership reform is also designed to inject market discipline into the debt-ridden state sector, as well as opening up additional financing.
The State Council has already decided which firms to include, choosing state enterprises run by regional authorities as well as the central government, said Meng Wei, spokeswoman for the National Development and Reform Commission.
“Currently we are pressing the pilot enterprises to draw up implementation plans,” Meng said.
The 19 pilot firms selected in the first and second rounds of reform were gradually implementing their restructuring programs, she told a briefing, adding that China’s overall reform plans remained on schedule.
More than a third have already “basically completed” reforms aimed at introducing new investors, boosting corporate governance and setting up new internal incentive mechanisms, she said.
Overcapacity, poor corporate governance and low labor productivity have dragged down the profits of China’s SOEs, which deteriorated in 2015.
China has launched a series of reforms to invigorate its torpid SOEs, including changing their shareholding structure, spinning off non-core assets and encouraging innovation.
The Ministry of Finance showed that combined SOE profit rose 24.9 percent year on year in the first three quarters of this year, quickening from the 21.7 percent expansion in the first eight months, Xinhua news agency reported.
China will continue to “deepen” reform of SOEs and experiment with new ownership structures, but strengthening Party leadership remains the guiding principle, according to the state asset regulator.
Imposing Party discipline on state firms remains a key part of China’s goals in its effort to fight graft, upgrade domestic industry and dominate overseas markets, Xiao Yaqing, chairman of the State-owned Asset Supervision and Administration Commission, said in remarks published on Tuesday.
Xiao said the reforms were part of efforts to build a new “socialism with Chinese characteristics” as well as other strategies set out by President Xi Jinping during last month’s Party congress.
“The state-owned firm is an important force to promote national modernization and safeguard public interests, and an important material and political foundation for the development of Party and state affairs,” Xiao said.
China’s total state-owned assets, excluding the financial and cultural sectors, had reached 154.9 trillion yuan (US$23.4 trillion) at the end of last year, up 73.1 percent from a year earlier, Xiao said.
But despite major breakthroughs in industries such as space flight or high-speed railway, state enterprises still suffered from “imbalances” and structural flaws, and must create management systems and market mechanisms better suited to China’s new needs.
He said China would continue to streamline and upgrade state companies while promoting restructuring and mergers, besides developing strategic sectors, curbing overcapacity and tackling “zombie enterprises.”
China launched its reforms of state firms in a bid to rescue the crisis-hit sector by using market forces to revive lumbering and debt-ridden industrial giants.
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