Reform makes China's top nuclear power producer more competitive

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03:06

"Quicken state capital and state-owned enterprise reforms." That's one of the highlights of Chinese Premier Li Keqiang's recent delivered government work report, as the country is entering the final stage of implementing a five-year guideline by 2020 in SOE reform.

"The state-owned enterprises (SOEs) should continuously increase the vitality of development and the core competitiveness through reform and innovation," Li stressed.

The SOE reform process has seen a lot of hard efforts since China's reform and opening-up began. China says that it will quicken its SOE reform, a move in giving more autonomy and energy to SOEs, to help encourage them to mix with social capital, and better interact with private sectors.

All SOEs, big or small, have experienced marketization and restructuring, and significantly improved their business quality and efficiency.

Chinese Premier Li Keqiang delivers a government work report, March 5, 2019. /Xinhua Photo

This is the same with China National Nuclear Corporation (CNNC), one of China's top SOEs and a major nuclear power producer.

Gu Jun, president of CNNC said that the company indeed went through pains and had costs to pay.

"But in general, we constantly optimize our organizational structure and technology platform, seek breakthroughs, and cultivate leading scientists and technicians," he said.

Now the company has become an international nuclear power giant, already helping build and operate six nuclear power stations for other countries.

CNNC, as China's top SOE, now is one of the world top nuclear power providers due to its reform and opening up./CNNC photo

And such capability is given impetus by a recent merger between it and China's sole nuclear power engineering and construction firm.

"This made us compete in the international market with more intensive management and a more competitive industrial chain,” Gu said.

It's part of Beijing's efforts to streamline the SOE sector since 2015 to make businesses more profitable with mergers, reductions and shutting down of zombie companies.

Gu commented that if an SOE wants to merge with social capital, it will be appraised all around as the counterpart wants to see whether it's worthy. So, this type of reform for CNNC still takes time and efforts.

Through decades of reform, CNNC has become China's major nuclear power producer and connects other countries for cooperation in energy, heating and medical treatment./CNNC photo

However, in the reform, there are difficulties, like in the merger with social capitals in recent years.

"We have things like mixed ownership, a diversity of equities, a market orientation, and professional managers. We are pushing hard, but the process hasn't been all that smooth," Gu Jun said.

But this year, the word “acceleration” appeared in the government work report for SOEs' reform.

Wu Changqi, a professor of strategy at Guanghua School of Management, Peking University said that SOEs need to have more autonomy in the deepened reform.

"They are trying things they are experimenting with, but they need to be endorsed, and to be spread in all the SOE sectors. That's why when you think about adding this acceleration, it means the government indeed wants to move forward," Wu said.

Now, even the most important SOEs like CNNC are making strides in reform and opening-up, and the determination for an optimized running of the state capital and SOEs is evident.

Experts said that this year that China will face both a more complicated and difficult domestic and international business environment. In any event, the nation will accelerate SOE reform and lay a solid foundation for decisive results in the sector next year.