Private and foreign capital encouraged to participate in boosting efficiency
Centrally administered SOEs have contributed greatly to the country's economic growth in the past several decades. Today, the reform and restructuring of central SOEs have also been placed on top of the government agenda, aiming to boost their efficiency along with supply-side structural reform.[Special coverage]
The State Council's executive meeting on Sept 27, presided over by Premier Li Keqiang, decided to further push forward mixed-ownership reform and the restructuring of central SOEs in five areas: manufacturing, coal mining, electricity, telecommunications, as well as chemical engineering, according to a statement released after the meeting.
It was also made clear that the reform and restructuring of central SOEs welcomes participation of both private and foreign capital. The new round of restructuring will be a key opportunity to boost reform and the institutional innovation of central SOEs, as pointed out at the meeting.
"Centrally administrated SOEs are important backbones of China's economy. Restructuring central SOEs is, in essence, to deepen reforms, and take it as an opportunity to advance SOE reform and institutional innovation, to improve central SOE quality and efficiency, and realize economic transition," Li said at the meeting.
He called for central SOEs, regardless of size, to further coordinate in developing the Internet Plus mode of growth and mass entrepreneurship platforms to free them from rigid structures and advance institutional innovation.
Li Jin, chief researcher at the China Enterprise Research Institute, pointed out the current round of reform of central SOEs is an important part of the ongoing supply-side reform.
"This round of central SOE reform and restructuring, especially in the five areas, has placed a stronger focus on phasing out excess capacity and reducing costs," he said. "This will push forward the industrial chain to move toward the mid-and-high end."
He also said that making good use of the Internet Plus and innovation platforms, which was reiterated by the premier, has become an important feature of this round of central SOE reform.
He added that reform of central SOEs in the past five years kicked off when these SOEs were faced with a variety of obstacles. China's supply-side reform in recent years has adjusted the economic structure and tackled low efficiency, and has successfully helped develop new sources of growth for central SOEs through market forces.
Xiao Yaqing, chairperson of the State-owned Assets Supervision and Administration Commission, said during a news conference on Sept 28 that China has completed a top-level redesign of SOEs in the past five years, allowing them greater coordination. And with reforms going deeper, central SOEs will take on new features and record more lasting achievements.
"We welcome companies of all ownership types, as well as foreign companies, to participate in China's SOEs mixed-ownership reform," Xiao said at the news conference.
Since 2013, a total of 34 central SOEs have been restructured, including a merger of two of China's top bullet-train manufacturers and two major steel makers. This overhaul has reduced the number of central SOEs to 98 from 117.
