Experts have forecast that there might be major changes in China's
state assets management system as early as the end of this year.
This was the message at the second annual meeting of the State
Assets Operation Forum held in September in Shanghai. Respected
Chinese economist Fan Gang delivered the keynote speech setting out
his views on a future state assets management system.
The forum attracted senior officials from the Ministry of Finance
and the Shanghai municipal government. Also present were senior
executives from 24 companies responsible for managing state assets
and experts in the field like Fan Gang, Wei Jie and Hua Min.
It
is hoped that the event will have helped facilitate reform in state
owned enterprises (SOEs).
Administering State Assets
The October 1998 founding of the State-owned Assets Administration
marked the beginning of a new round of reform in the management of
China's state assets. Recognizing the important place occupied by
this reform in the context of China's overall economic reform, the
State Economic and Trade Commission and the Economic Restructuring
Office of the State Council recently initiated relevant
research.
Delegates said they expected the new state assets management system
would be established by the end of this year. It would adopt a
model in which central government would own the state asset but
operate the asset with the cooperation of local government.
Fan Gang called for an institution to administer state assets. It
must represent the public interest. To do so it must shoulder the
responsibility of not only guaranteeing the security of state
assets but also of ensuring that they are appreciating assets.
In
order to promote reform and optimize contacts with other government
departments, he suggested that as an interim measure the
institution should be established as a government department.
Fan Gang holds that this public institution should not only insure
the good use of capital resources but should also have a role to
play in maintaining the balance between the supply of goods in the
private and public sectors.
Fang said, "At a time when goods and services provided directly to
the public such as basic facilities, public services and social
security are in short supply, those responsible for state assets
should increase this supply by reallocating capital earmarked for
industrial use. Their goal should be for growth in state assets
while at the same time optimizing public interest rather than
profit."
He
said, "The ownership of state assets resides with both central and
local governments. Local governments should be responsible for the
local state assets and have state assets management companies to
manage the funds on their behalf. These companies should operate at
the funding level only and not get involved in activities at the
enterprise level."
Towards a Unified System
Liu Jipeng is a well known Chinese economist. He noted that SOEs
are currently administrated by a whole array of different
organizations like the Ministry of Finance, the Ministry of
Personnel, the State Development Planning Commission, and the State
Economic and Trade Commission. Considering this chaos he suggested
that China should set up a state-owned Assets Supervision
Commission to unify responsibility for finance, personnel and
decision-making in a single organization.
According to Liu, central and local governments should administrate
their respective state assets separately. He called for a new state
assets management system to be established. In this system, the
state assets operation company would ensure best use of assets by
enterprises in the public sector.
The Shenzhen Experience
In
1994 Shenzhen began a fundamental reform of SOEs. A state assets
management and operation system was set up in which the City
State-assets Management Commission, the State-assets Operation
Company and the relevant enterprises cooperated.
Following approval by the Shenzhen State Assets Management
Commission, three state assets operation companies were
established. These are the Shenzhen Investment Company, the
Shenzhen Construction Investment Holding Company and the Shenzhen
Business Investment Company.
Recently five state-owned enterprises including the Shenzhen
Airport Group Co. were approved by the Shenzhen city government to
operate state assets. These new pilot enterprises involve state
assets of over 20 billion yuan (US$2.42 billion).
The five companies benefit from greater autonomy on matters of
finance and personnel and in their decision-making generally.
For example if they need to reallocate or dispose of state assets,
they just need to register the moves with the Shenzhen State Assets
Management Commission instead of having to wait for approval.
(china.org.cn by Tang Fuchun, October 6, 2002)