China has decided to further decentralize its major state-owned
enterprises (SOEs), urging them to become single entities and to
attract investors, Li Rongrong, minister of the State-owned Assets
Supervision and Administration Commission said in an article
in Party magazine Qiu Shi.
China will diversify the ownership of centrally-administered
SOEs whose operations do not involve national security or in which
private and foreign investment are not forbidden, wrote Li.
Li said that the prime objective this year would be to quickly
get regulations finalized in order to standardize the management
and transfer of state-owned shareholdings of listed companies.
"SOEs that cannot go public as single entities should facilitate
the shareholder reform of their subsidiaries," reads the
article.
"Shareholder reform is a key trend for large SOEs," said
Vice-Director Chen Deming of the National Development and Reform
Commission, who added that the primary target of this move was to
diversify SOE ownership in order to relieve state capital of the
full SOE burden.
SOEs cover a wide range of areas, monopolizing such services as
electricity, telecoms and railway transportation. Experts have
hinted that although stock market listings and shareholder reform
would indeed diversify ownership, the monopolies themselves would
remain.
Speaking recently at an economic reform conference, Chen
revealed that China was seeking ways to bring an end to industry
monopolies.
At present, only 33 of China's 159 centrally-administered SOEs
have launched initial public offerings at home and abroad. However,
these same SOEs own 194 listed firms on the mainland and 57 in Hong
Kong.
The new stage of reform has come after most of the 194 locally
listed firms owned by SOEs completed shareholder reforms agreed
upon back in April 2005.
Despite increased trading performance and rising profit margins
in recent years, Li Rongrong also revealed that by 2010, the total
number of centrally-administered SOEs would be reduced to close to
100.
(Xinhua News Agency April 5, 2007)