Government ups support to SOE economy to sustain growth

0 Comment(s)Print E-mail China Daily, January 14, 2023
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China will guide State-owned capital to support key industries and areas, and advance the strategic restructuring and professional integration of its State-owned enterprises in 2023, according to the country's top State assets regulator.

The plans come as the State-owned Assets Supervision and Administration Commission of the State Council, or the SASAC, said the government will fortify SOEs' industrial layouts in areas like energy resources, grain supplies and strategic material reserves this year.

Addressing a meeting in Beijing on Thursday, Zhang Yuzhuo, Party secretary of the SASAC, told heads of locally administered SOEs that the government will rely on the leading role and strategic support of the State-owned economy to assist the country in stabilizing its economic growth, employment and goods prices this year, while contributing to the overall improvement of economic operations.

In addition to pushing SOEs to carry out technological research based on national strategic and industrial upgrading needs, the SASAC urged SOEs to pay close attention to the risks of local financing platforms, take prevention measures and tighten risk controls in key areas, including debt, real estate, finance, investment and environmental protection, and reinforce risk monitoring and prevention work systems this year.

The meeting noted that China's three-year (2020-22) action plan for the reform of SOEs ended in 2022 and all expected goals have been reached.

The plan is designed to transform SOEs into competitive, modern enterprises and lead to all-out efforts by localities and numerous breakthroughs.

The completion of the three-year action plan indicates that the corporate-governance reform of SOEs has been concluded and they are practically no longer required to perform social functions, said Li Jin, chief researcher at the China Enterprise Research Institute in Beijing.

For instance, more than 20 centrally administered and local SOEs, including Aviation Industry Corp of China Ltd, State Grid Corp of China and Power Construction Corp of China, have transferred ownership of their affiliated hospitals and clinics to China General Technology (Group) Holding Co Ltd (Genertec) since 2018.

By taking over hospitals from these SOEs, the Beijing-headquartered Genertec will manage 343 hospitals and 48,000 hospital beds with more than 50,000 doctors and nurses across China by the end of March of this year, said Yu Xubo, Genertec's board chairman.

Breakthroughs have also been made in key areas including optimizing the modern enterprise system and the market-oriented operation mechanism. Both central and local SOEs' earning and operating strength will be improved and more innovative activities are expected to be seen in the years ahead, said Liu Xingguo, a researcher at the Beijing-based China Enterprise Confederation.

China's local SOEs saw their total assets surge 10.1 percent year-on-year to 205.5 trillion yuan ($30.52 trillion) by the end of November 2022, according to information released by the SASAC.

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