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)