Reforms of SOEs will push ahead next year
By Fu Jing (China Daily)
Updated: 2005-12-23 06:15
Related: Reforms of SOEs will push ahead next year
China will set up asset-management companies (AMCs) as a platform to push
forward the restructuring of State-owned enterprises (SOEs) next year, a senior
official said yesterday.
"The conditions for establishing asset management companies are ripe," Li
Rongrong, director of the State-owned Assets Supervision and Administration
Commission (SASAC), said at a press conference in Beijing.
According to Li, the property rights of SOEs have been clarified and
corporate governance is at the forefront of reforms, which has created a
suitable environment for AMCs.
SASAC has completed drafting a plan for SOE restructuring and State asset
distribution, and AMCs will be in charge of implementation.
Two central SOEs were appointed by SASAC as trial AMCs Chengtong Group in
June and State Development & Investment Corp in December and they have begun
taking over loss-making SOEs.
New models of asset management will also be explored, Li added, but did not
China has about 138,000 SOEs, which employ 43 million people. Li's commission
is responsible for 169 SOEs affiliated to the central government, which provide
jobs for 10.53 million.
In the past few years, between 4,000 and 5,000 SOEs have been restructured;
and Li said the efforts have been rewarded as net profits of SOEs have increased
The 169 enterprises under SASAC achieved estimated sales of 6.6 trillion yuan
(US$825 billion) in 2005, up more than 21 per cent year on year.
And the net profits of these enterprises are expected to reach 600 billion
yuan (US$75 billion) this year from last year's 480 billion yuan (US$60
billion), up 20 per cent.
Earlier reports said that the 169 companies contribute some 60 per cent of
the tax revenues collected from SOEs.
Li also disclosed that China National Coal Group, the country's top coal
exporter, would probably be listed in 2006.
At the conference, Li said China National Petroleum Corporation (CNPC) should
take "leadership responsibility" for the explosion at its Jilin Petroleum and
Chemical Company, which caused about 100 tons of pollutants containing hazardous
benzene and its derivatives to leak into Northeast China's Songhua River.
"But Jilin Petroleum and Chemical Company should take major responsibility
for the accident and its aftermath," said Li.
Three executives of the company held responsible for the explosion have been
sacked and former State Environment Protection Administration minister Xie
Zhenhua resigned owing moral responsibility.
At yesterday's conference, Li also warned that the heads of major SOEs could
be sacked "once they are found to be underperforming."
(China Daily 12/23/2005 page1)