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China to step up SOE supervision

Xinhua ,December 14, 2017 Adjust font size:

China will step up supervision over state assets with differentiated regulatory policies for state firms and more emphasis on overseas projects.

State-owned enterprises (SOEs) should strengthen the role of board of supervisors, improve corporate governance and bring in more private investment to enhance competitiveness and performance, said a statement released after a State Council meeting chaired by Premier Li Keqiang on Wednesday.

The meeting came as part of the latest efforts from the central government to stimulate torpid SOEs. An array of policies have been rolled out in the past years.

Thanks to reform measures, China's state firms have posted better performance, with profit growth of central SOEs at the fastest pace in nearly five years in the first three quarters.

The statement said SOEs' board of supervisors have moved actively in reform and innovation, excess capacity cuts, reorganization, and streamlining management since the beginning of the year, but more efforts are needed.

Internal control in some companies should be improved, and risk management has to be strengthened in some investment projects.

SOEs should enhance their operational management, with effective corporate governance structures and market-oriented policy making. They will also be given more autonomy.

The statement stressed quality in SOE development, saying that state assets should shift to sectors that concern national security, economic lifeline, and major infrastructure construction, and should focus on the real economy.

SOEs also should make more efforts to push forward mixed-ownership reform, handle zombie companies, and reduce debt levels, according to the statement.