11 Central State-owned Enterprises Select for Reform of State-owned Asset Investment Companies


Beijing has selected 11 central state-owned enterprises (SOE’s) to implement “upgrade” reforms of state-owned asset investment companies.

According to a report from Economic Information Daily trials for the reform of a new set of state-owned asset investment companies have already been launched, with Beijing calling upon 11 central SOE’s to submit reform plans prior to the end of January for mixed-ownership, restructuring or initial public offerings.

These companies include Aluminium Corporation of China, China COSCO Shipping, China National Building Material, Xinxing Cathay International Group, China National Machinery Industry Corporation, State Power Investment Corporation and China General Nuclear Power Group.

Aluminium Corporation hopes the moves will “accelerate the creation of an international first-class non-ferrous metals company, while China COSCO will “undertake deep and wide-spread exploration in areas including mixed-ownership, incentive and restraint mechanisms and overseas operation.”

China National Building Material said that it has made trial reforms involving state-owned asset investment companies the “priority of priorities” for work in 2019, and will “use the mixed-ownership system to attract large volumes of social capital.”

Xinxing Cathay’s goal is to create an “international first class state-owned asset investment company,” with measures including internal restructuring, external acquisitions and mergers, and the undertaking of mixed-ownership reforms.

China National Machinery said that it will steadily drive resource integration via the use of core enterprises or listed companies as platforms, while State Power Investment will “actively establish organisational structures, operating models and operating mechanisms which satisfies the needs of state-owned asset investment companies,” including “market-based operating mechanisms, mixed-ownership systems, medium and long-term incentives and employee shareholding.”

During the period since 2014 State-owned Assets Supervision and Administrative Commission (SASAC) has selected 10 central SOE’s and 122 local SOE’s for trial reforms of state-owned asset investment and operating companies, with the goal of “expediting industrial structural adjustments and capital structure optimisation.”

Li Bing (李冰), head of SASAC’s Capital Department, said that as of the end of October 2018 the agency had overseen the the transfer of approximately 130 billion yuan in the listed shares of central SOE’s to two capital operations companies.

These two companies have in turn established six funds, including China State-owned Capital Risk Investment Fund (中国国有资本风险投资基金) and the China State-owned Enterprise Structural Adjustment Fund (中国国有企业结构调整基金), with a total scale of 864.5 billion yuan, and cumulative investments of 168 billion yuan.

“Restructuring of state-owned asset investment and operating companies is at the core of reform of the state-owned asset authorisation and operating system and a key part of improvements to the state-owned asset management system,” said state-owned media.