SOE reform a key to China's economic restructuring
World Insight with Tian Wei
China's annual political season has been focusing on the reform and development of the country's state-owned enterprises. China says it will quicken its reform on state-owned enterprises (SOE), as the country enters the final implementation stage of a five-year guideline to have decisive results by 2020 in the sector.
The reform of state-owned enterprises has always been key to China's economic restructuring. Mixed ownership is vital to increasing SOEs reform, as it can improve the efficiency and competitiveness of state-owned assets.
"The State-owned Assets Supervision and Administration Commission lists China Merchants Group as a pilot for international capital investment companies. Mixed ownership involves multiple economic sectors. Two-thirds of our secondary companies have already achieved mixed ownership, entering both international and domestic markets. One third of secondary companies are diversifying their equity institutions under the guidelines of the mixed ownership reform plan. They will enter both domestic and foreign markets, which will be achieved within three years," Li Jianhong, a CPPCC member and the chairman of the China Merchants Group, told CGTN's Tian Wei.
SOEs are facing lots of competitions nowadays, as China is opening up to more foreign investment. Li said SOEs could enhance capabilities in market competition, stressing that "China Merchants has a history of more than 100 years. We are adhering to a market-oriented mechanism. We have no monopoly industries. Our companies compete fairly and regularly with others, such as private firms and foreign capital, and also enhance capabilities in market competition."
However, Li believes it is a challenge for many state-owned enterprises, because they must rely on technology and talents to stand out in market competition.
Chinese Premier Li Keqiang also talked about predictable and unpredictable challenges while delivering the government work report at the opening of the annual meeting of China's legislature last week.
As the head of one of the biggest SOEs in China, Li expressed that risk management is more important than making money.
"We have to prepare for all possible adverse conditions and make the best efforts. Premier Li mentioned the relationship between stable growth and risk management in this year's government work report. We believe that risk management is more important than making money. If the risks are not controlled, it would not be profitable."
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