China aims to finish reform of SOEs by end of 2017

BEIJING - China aims to finish the reform on transforming the ownership, management and supervision of state-owned enterprises (SOEs) directly under the central government to that of corporation systems by the end of this year, according to a briefing held by the State-Owned Assets Supervision and Administration Commission (SASAC).

By the end of 2016, 92 percent of the SOEs and their subsidiaries under SASAC supervision have undergone reformations towards corporation systems while over 90 percent of those under the supervision of provincial state-owned assets supervision and administration commissions have gone through reformation.

Such reform will help SOEs establish a market-oriented operation system that is efficient and flexible, as well as facilitate other reforms relating to shareholding and ownership.

According to Peng Huagang, deputy secretary general of SASAC, the reform will promote SOEs to better play its leading role in the market economy, since the government will only take limited responsibility for the enterprise based on the proportion of its investment once the reform is finished.

As for the reform schedule, Peng said all SOEs directly under the central government are required to finish it by the end of this year.

Since last year, eight more SOEs have been selected to pilot reforms in ownership, management and supervision together with the State Development and Investment Corporation (SDIC) and China National Cereals, Oils and Foodstuffs Corporation (COFCO), reaching a total number of 10.

Through the pilot reform, SOEs directly under the central government will gradually be formed into three types of companies.

"There will be a few SOEs directly under the central government focus on capital operation, others on investment while some others on entity industries," said Peng. — Reuters