China adds 31 more SOEs in third round of SOE reforms

World
Europe

An official with China's top economic planner said on Wednesday that the country has included another 31 state-owned enterprises (SOEs) in a pilot mixed-ownership reform scheme.

The third round of mixed-ownership reform program will involve both centrally and locally administered SOEs, according to Meng Wei, spokesperson of the National Development and Reform Commission.

"We are losing no time in helping the SOEs draw up reform plans," Meng said at a press conference.

So far, two rounds of pilot programs have been launched for 19 SOEs in industries ranging from electrical services to civil aviation to experiment with the mixed-ownership reform, which allows private or even foreign investment in the companies.

Reuters Photo.‍

Meng said more than two-thirds of the 19 SOEs have seen the introduction of outside investors, registration of new firms, restructuring of corporate governance and establishment of internal incentive systems.

The pilot reform has produced results, improving the SOEs' strength and lowering their leverage, she said.

The first two rounds of reform programs mainly covered central SOEs such as China Eastern Air Holding Company and China Southern Power Grid.

Overcapacity, poor corporate governance, and low labor productivity have dragged down profits of China's SOEs, which deteriorated in 2015.

China has launched a series of reforms to invigorate its torpid SOEs, including changing their share-holding structure, spinning off non-core assets and encouraging innovation.

The Ministry of Finance showed combined SOE profits rose 24.9 percent year on year in the first three quarters of this year, quickening from the 21.7 percent expansion seen in the first eight months.

Source(s): Xinhua News Agency