Oversight of overseas State-owned assets strengthened

Editor's note: The Chinese government has established a bureau for overseas State-owned assets, aiming to guide State-owned enterprises in their international operations and help them optimize the layout and adjust the structure of their overseas assets. China Newsweek spoke to Li Jin, chief researcher at the China Enterprise Research Institute; Wu Gangliang, a researcher at the China Enterprise Reform and Development Society; and Wang Changqiang, a researcher of SOE reform, on the necessity of establishing the bureau. Below are excerpts of the interviews. The views don't necessarily represent those of China Daily.

For a long time, the regulation of overseas State-owned assets has been plagued by three major challenges: geographical distances, extended asset chains and difficulty in management, all of which pose potential risks to asset security. The establishment of the bureau aims to introduce full-cycle oversight of SOEs' overseas investment, operations and compliance.

The bureau will strengthen risk prevention and mitigation related to overseas investments and operations of SOEs, as well as handle overseas emergencies and crisis situations.

The move is expected to not only strengthen the safeguards for State-owned assets abroad, but also encourage the relevant companies to standardize their cross-border practices, sharpen compliance awareness and better align with international business norms.

As China's SOEs develop overseas, they face a range of risks. The extensive and dispersed nature of overseas asset chains also leads to weak financial supervision and gaps in ownership management, increasing the risk of asset loss. External factors such as exchange rate volatility and geopolitical tensions further add to the uncertainty.

In the past, oversight responsibilities were spread across multiple departments, with some handling strategic planning and global expansion, others focusing on ownership and asset disposal, while financial supervision and risk control were managed elsewhere.

This fragmentation resulted in unclear lines of responsibility and limited coordination, making it harder to respond effectively to increasingly complex risks, including geopolitical tensions and international compliance requirements.

The bureau is designed to consolidate these dispersed functions under a single authority, creating a clearer and more coherent system that encompasses planning, supervision, risk control and emergency response. While other departments will continue to play a role, their efforts will be coordinated through this dedicated body.

As a result, the oversight of overseas State-owned assets will become more specialized and stringent, leading to more standardized practices in overseas investments and mergers. Risk prevention is expected to move further upstream, with tighter compliance requirements aimed at preventing the loss of State-owned assets.

However, the true test lies in the effectiveness of the new system. There are several challenges in this regard. First, the regulators rely on self-reported data from enterprises, making it difficult to obtain an accurate picture of a company's situation. Second, the bureau needs to balance the relationship between business operations and security oversight. Third, managing geopolitical risks requires coordination across multiple agencies, including those responsible for diplomacy, commerce and security, rather than relying on a single body.