State-owned Enterprises Suspended as Mixed Ownership Reforms Wait in the Wings

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A slew of state-owned enterprises (SOE’s) have been suspended from trading in the lead up to the third round of mixed-ownership reforms.

China Securities Journal reports that as of 30 October a total of 56 out of the 1054 A-share SOE’s had ceased trading, of which 12 had been temporarily suspended and 44 suspended for “major incidents.”

An anonymous expert on the state-owned assets sector said to China Securities that the move heralded the start of the third-round of mixed-ownership reforms of SOE’s.

“At present mixed-ownershp reforms have already entered the operation phase of trials and key focal areas.

“Considering the timetable previously released by the National Development and Reform Commission (NDRC), it is expected that mixed-ownership reforms will mainly be concentrated in the fourth quarter, and that it the next two months we could see the concentrated release of central SOE reforms.”

The source also expects mixed ownership reforms of local SOE’s to see a sharp increase prior to the year’s end.

NDRC documents indicate that key sectors for SOE mixed-ownership reforms include power, petroleum, natural gas, rail, civil aviation, telecommunications and the military.

Beijing has already selected a total of 19 central SOE’s for the first two rounds of reform trials, with telecommunications giant China Unicom and China Eastern Airlines making their reform plans public.

The State-owned Assets Supervision and Administration Commission (SASAC) is currently in the process of drafting a list of companies for the third round of reforms, with analysts speculating that both upstream and downstream energy firms are likely to feature, following the emergence of an oil and gas reform plan towards the end of May that made reference to mixed-ownership trials.

Liu Xingguo, a SOE reform researcher, said to China Securities Journal that the third round of reforms could also cover companies involved with metals, mining and widely circulating commercial goods.

 

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