China’s State-owned Assets Supervisory and Administrative Commission (SASAC) claims that the government is impartial in its treatment of the country’s immense state-owned enterprise sector, after official data revealed that it posted surging profit growth for the first three quarters of 2018.
At a State Council press conference held on Monday Peng Huagang (彭华岗) , SASAC vice-secretary and media spokesperson, highlighted the success of central SOE’s in raising their revenues, efficiency and tax contributions in the first three quarters of 2018, while also reducing their debt ratios.
Official data indicates that central SOE’s saw net operating revenues of 21.1 trillion yuan for the first three quarters of 2018, for a YoY rise of 11%.
Total profits reached 1.3491 trillion yuan, for a YoY leap of 21.5%, while as of the end of September the average debt-asset ratio of central SOE’s stood at 66%, for a decline of 0.5 percentage points compared to the same period last year and 0.3 percentage points compared to the start of 2018.
Peng said that China SOE’s had already become integrated with the market economy following four decades of reform and liberalisation, and that the goal of reforms were to make SOE’s “truly become independent market actors that operate independently, bear loses independently, independently bear risk, are independently restrained and independently develop.”
In his opinion this means that SOE’s should engage in fair market competition against private companies and be subject to the same legal restraints and protections.
“At the B20 Argentina Conference some people raised the issue of ‘distorted SOE competition,'” said Peng. “Such remarks overlook the full integration of SOE’s into the market following the reform period, and the fact that they engage in fair market competition against other enterprises.
“Consequently, we also advocate ‘ownership neutrality,’ and are opposed to setting different rules for enterprises subject to different ownership systems, and opposed to discriminatory treatment of SOE’s in the formation of international rules.”
Peng’s remarks arrive just after Chinese central bank chief Yi Gang said that the Chinese government was considering the use the principal of “competitive neutrality” in its treatment of SOE’s, and would refrain from providing them with any competitive advantages.
In response to claims that China’s SOE’s were engaging in the large-scale takeover of private enterprise by capitalising upon their financing difficulties, Peng said that Beijing would be “unwavering” in its encouragement, support and guidance of the growth of the non-government economy, and that mixed-ownership reforms were “bi-directional” and “win-win” in nature.
Peng said that private enterprises are encouraged to participate in the reform of SOE’s, while SOE’s are also encouraged to make investments in private enterprise.
He pointed out that two-thirds of central SOE subsidiaries at all levels are now mixed-ownership enterprises, following efforts to cull their numbers.