Established in 1956, Guangzhou Pearl River Piano is one of the oldest piano-makers in China. But, as a traditional state-owned enterprise (SOE), the secretary of its board, Yang Weihua said its business model had been inefficient for many years, so the decision was made to diversify their structure and look for new areas of growth.
Yang told CGTN that through SOE reform, the company's shareholding structure has changed. With more private capital, state-owned assets decreased from 100 to 81 percent. They also expanded our businesses to digital musical instruments and music education through online platforms.
The changes certainly gave the company a new lease of life. Today the company has gone international. Last year, it purchased the world-renowned German piano maker, Schimmel. The company said its reforms have not only enabled it to become the world's largest piano maker, but also allowed it to operate off a more diversified business plan.
At last year's government work report, Premier Li Keqiang emphasized that in 2016 and 2017, the central government will use reform to promote the development of SOEs and push hard to ensure success in upgrading them and improving their performance.
Xiang said on one hand, the central government is suggesting giving the companies more space, whilst creating a more flexible business environment, But, on the other hand, these SOEs need to keep innovating and improving their efficiency levels.
China is promoting a "mixed ownership" model -- where the private sector can invest in SOEs -- as part of reforms. Policymakers plan to introduce this in sectors like electricity, oil, military, and civil aviation as early as this year. China's state-owned enterprises have played a key role in the rapid development of the country's market economy. So maybe sooner, rather than later, many of China's SOEs can play on the same note as Guangzhou Pearl River Piano.
