What the public has been interested in is that which one could be finally chosen as the experimental unit for the mixed-ownership reform among all those state-owned enterprises (SOEs). For the heads of the super-scaled SOEs, the company to be listed in the reform is not only an opportunity to bring in social capital, but more importantly, to gain the reform warranty of the State-owned Assets Supervision and Administration Commission (SASAC).
Source: Internet
Zhang Xiwu, deputy director of the SASAC published the experimental plan for the Experimental Units of Ten Reform Projects of the SOEs on 25 Feb. The reform of SOEs has been the focus again a few days ago.
As the crucial part of the SOE reform, the mixed-ownership reform has been widely discussed in the recent years.
According to Zhang Xiwu, the mixed-ownership reform would be taken place in the monopolistic areas like electricity, oil, natural gas, railway, civil aviation, telecommunication, and war industry in the upcoming the Experimental Units of Ten Reform Projects. The government aims to attract multi-variety private investment to shape management structure and operation system to the benefit of participating market competition.
What the Zhang said also means that marketization-oriented mixed-ownership reform is in the full-scale acceleration.
For all the time, the industries of oil, electricity, and war have been deemed to be the key field that gathered state-owned assets. And that’s the reason for those enterprises have always been called as monopolistic companies.
"It is really excited that the high level officials of the government dare to renovate the SOEs, which shows the determination of the government to conduct the reform.” According to Li Jin, the executive director of the China Equipment Management Institute, mixed-ownership reform is one of the key threads of the state-owned reform.
Li pointed out that the present single state-owned property right is not very effective in improving the efficiency of the SOEs, while thoroughly promoting the mixed-ownership reform helps enterprises improve their management level and restrict the issues of over administration.
Before then, there are many central state-owned and local state-owned enterprises, like the Sinopec, CNPC, State Grid Corporation of China, and the Bank of Communications, began to explore the mixed-ownership reform in different steps and patterns. In fact, in terms of the mixed-ownership reform, the Sinopec has already been the frontier.
In Feb. 2014, Sinopec announced that the company has taken the lead in launching the project of introducing the social and private capital into the marketing businesses of the oil products to achieve the mixed ownership. It authorize the president of the company to determine the investors, shareholding ratio, terms and conditions for participation if the shareholding ratio of the social and private capital less than 30%, and organizes and implements the plan and handle the procedures.
Lv Dapeng, spokesman of Sinopec, said on 26 Feb., the mixed-ownership reform of the oil products marketing businesses developed rapidly and has became the bellwether in the mixed-ownership reform of the central enterprises. The high speed the Sinopec advanced its reform has greatly exceeded the expectations of the industry.
Sinopec said it will continue propel the mixed-ownership reform. According to Lv Dapeng, “the next step would not only focus on appealing capital but more importantly to conduct the innovation in system and mechanism, and to propel and deepen the diversified operation.” As the project is still in discussion, Lv didn’t release the details of the reform in the press conference.
The other central enterprises that have been mentioned in the previous part of the article are not unified in terms of the progress of the reform, some of which just began to start. Sinopec has invested a number of pipeline assets to introduce the investment of social capital. The construction of the third line of the West-to-East Gas Transmission Pipeline has also introduced the social capital investment, like the capital from the National Social Security Fund and the Bao Steel.
The State Grid Corporation of China proposed to introduce the social investment into the four power grid projects: pumped storage power station, energy storing device, electric vehicle charging device, and the access project of the distributed generation. In the future, it will study the incremental distribution network structure and conduct experimental units of the mixed-ownership.
On 16 June 2015, the Bank of Communication announced that the deepening reform plan of the bank has been approved by the State Council. Since then, the mixed-ownership reform of the major bank began to make substantive progress.
Besides, as one of the Experimental Units of Ten Reform Projects, the plan for popularizing the employee-owned stock in the enterprises of the mixed-ownership reform has been widely concerned.
The plan of the employee-owned stock was originated from the United States in the 1920s as the “stock bonus plans”. The employee stock ownership plan (ESOP) of the listed company has been one of the important patterns of the employee stock ownership.
In the background of deepening the reform of SOEs, the ESOP has all the way been deemed as one of the important approaches in the mixed-ownership reform in the SOEs, especially for those who involved in the field of national security and the field of non-competitive. In this way, not only the working enthusiasm of the employee would improve, but also the relevancy between the company and other enterprises.
To some people’s point of view, popularizing the ESOP may become the channel that delivers profits and cause the lost of state-owned assets, which was completely wrong to Zhou Fangsheng, the expert of SOEs reform.
According to Zhou, “The capital has taken the risk and the employees have created the value. The employees are not only the laborer but also the creator. SOEs should award those who created higher profits among the management level and the average employees. If there’s no contribution of the employees, there’s no value retaining and increment of the state-owned assets.”
Zhou emphasized in the interview that the major reasons for the loss of the state-owned capital are the corruption due to the regulation and supervision failure and the investment mistakes.
“If there’s no reform,” Zhou said, “there would be the loss of the state-owned capital.”
According to the relevant departments, the high level has paid more attention to prevent the state-owned assets of the reform from losing, thus to guarantee the smooth implementation of the mixed-ownership reform.
"With the perfection of the law of reform and restructuring, the phenomenon of the assets loss could be prevented provided that the law was strictly implemented during the reform. In other word,” Zhou said, “the phenomenon of loss could also be regarded as the cost of reform.”
*This article is an edited and translated version by CCM. The original article comes from Jiemian.com.
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