Fourth Round of SOE Mixed-ownership Reforms to Encompass over 100 Companies

The next round of trial mixed-ownership reforms of Chinese state-owned enterprises (SOE) is expected to involve at least 100 companies according to statements from central government officials.

The National Development and Reform Commission (NDRC) and the State-owned Assets Supervision and Administration Commission (SASAC) have already formed a short-list of companies for the fourth round of trial mixed-ownership reforms, which will be implemented following approval by the State Council’s SOE leadership team.

NDRC spokesperson Yuan Da (袁达) said that the fourth round of trial mixed-ownership reforms represent a transition from the “laboratory phase” to the “small testing” and “medium testing phase.”

Yuan pointed out that the third round of trial reforms was primarily concentrated in a small number of key areas, meaning that their number was comparatively small at around 50 SOE’s in total.

The fourth round of trial reforms will focus on “expansion of volume” and “expansion of sectors,” involving at least 100 SOE’s

Economic Information Daily reports that the short list of companies for the upcoming reform trials encompasses around 158 enterprises including central and local SOE’s, with rail and power amongst the sectors represented.

Anticipation of upcoming SOE mixed-ownership reforms have already roiled Chinese markets, with Tianjin Jinbin Development (津滨) suspended from trading half an hour after the market opened on 8 May, after controlling shareholder TEDA (天津泰达建设集团) announced that mixed ownership reforms combining share expansion and equity transfers would see the introduction of two strategic investors.

The fourth round of reforms will further diminish Chinese government stakes in SOE’s, with TEDA’s mixed-ownership reforms expected to leave state-invested shareholders with just 30% equity. Harbin Pharmaceutical’s capital increase plan is expected to transform it from a state-owned and share-controlled enterprise (国有控股企业) into a state-owned share-participation enterprise (国有参股企业).

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