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SCIO briefing on reform of SOEs

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Speaker:
Xiao Yaqing, chairman of the State-owned Assets Supervision and Administration Commission of the State Council

Chairperson:
Hu Kaihong, spokesperson of the State Council Information Office

Date:
Sept. 28, 2017

Wall Street Journal:

What do you see as the challenges to reforming SOEs, especially in the northeast, both in the medium and long term, and in Liaoning Province in particular? What do you think are the best examples of SOE reform? Can you expound on anything that you see as progress?

Xiao Yaqing:

Thank you for the questions. They cover a wide range of issues. I'll try my best to answer them.

SOEs are faced with many challenges. It's difficult to say which one is the toughest. Actually, all the reforms we just talked about are challenges for SOEs. In my opinion, the most crucial issue is whether the reforms can cope with economic development, and this can be gauged by the performance of SOEs.

I'm fully confident of the result, and I'm eager to see how SOEs will achieve it. There are many challenges and problems ahead. The problems may concern specific issues and general policies, such as government supervision and regulation, and company development strategies. All of the problems will be our targets in reform and will be addressed step by step.

You mentioned SOE reform in northeast China. That is an important topic. The CPC Central Committee has been paying much attention to the economic development of the region, especially its SOE reform. In recent years, the CPC Central Committee and the State Council have introduced many guidelines and supportive policies to rejuvenate the region's economy. I can see that it is now developing at a steady pace. According to my multiple field trips, I've noticed some positive changes in companies there -especially SOEs.

First, much progress has been made in relieving SOEs of their obligation to operate social programs, like the obligation to provide water, electricity, heating, gas and property management services to their employees' homes. Second, SOEs in northeast China are also proactively transforming themselves.

Third, as an old industrial base, northeast China is home to many heavy industries. But it is now shifting toward robotics, software design and modern logistics, among other new and strategic industries.

For example, the reform of pharmaceutical companies in Liaoning Province has achieved considerable results in terms of effective management and relieving their obligations in social programs. The restructuring of Dongbei Special Steel Group, which is a typical case, is so far quite successful considering its difficulties. Of course, there are more cases to demonstrate that northeast China is prospering and we can expect much more from the development of SOEs there. Thank you.