SOE reform expands, speeds up

Updated 2017-06-05 14:27:05 Global Times

Program still has long way to go: expert

Mixed-ownership reform has expanded into 68.9 percent of Central government State-owned enterprises (SOEs) and their subsidiaries since a key Party meeting in 2013, the People's Daily reported on Saturday, citing the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council.

Peng Huagang, deputy secretary general of SASAC, said that mixed-ownership reform is speeding up following the issue of a guideline on deepening SOE reforms that was released by the State Council, China's cabinet, in September 2015.

So far, 1,995 reform agendas related to mixed-ownership reform have been completed by central SOEs and their subsidiaries since the Third Plenary Session of the 18th Communist Party of China Central Committee in 2013, Peng said.

In 2016, the number of projects undergoing mixed-ownership reform increased 45.6 percent from 2015, Peng said.

As of the end of March this year, the number of SOEs under the supervision of State-asset regulators at the provincial level doing mixed-ownership reforms had increased by 3 percent year-on-year, according to Peng.

At least 22.5 percent of central SOEs' subsidiaries have implemented mixed-ownership reforms, and 126 provincial-level SOEs had implemented such reforms at the group company level as of March this year.

As part of the mixed-ownership reform plan, the SASAC designated 10 subsidiary companies under different central SOEs to conduct pilot programs in February involving employee shareholdings, according to media reports.

For instance, at the China National Electric Apparatus Research Institute Co, which is under the central SOE China National Machinery Industry Corp, a total of 453 employees paid a combined 77.99 million yuan (.45 million) for a combined 22 percent stake of the company via a shareholding platform.

Tian Yun, head of the Information Department at the China Society of Macroeconomics Research Center, commented that mixed-ownership reform still has a long way to go.

"Take employee ownership, for instance. There are plenty of gray areas to navigate in the absence of detailed, clearly regulated guidelines from the government," Tian told the Global Times on Sunday.

"Many of the institutions have become market entities, and yet they are still loosely tied to the government. Those ties serve as intangible assets for these institutions to sell their services.

"While the government has always been keen to take account of a company's tangible assets, many of these intangible assets are never audited or appraised. It poses an issue," Tian said.

A few localities such as Central China's Hubei Province and Southwest China's Chongqing Municipality have designated 43 companies to conduct trials in employee ownership, according to Peng.

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