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Ministry of Finance to Expand Pilot Reform of SOEs to Implement Their Dominant Market Position

People Daily reported that the State Council recently issued, “Opinions to Implement the Pilot Reform of State-Owned Enterprises (SOEs).” It plans to expand the SOE reform pilot program and form a replicated model for more SOEs to follow.

The Opinions focus on the following four principles:

First, to ensure that the party maintains the overall leadership of state-owned enterprises, to implement the legal status of the party organization within the corporate governance structure and to ensure that the party’s and the state’s policies on major decisions are implemented.

Second, to insist that the market plays a decisive role in resource allocation while better enabling the government to play its role in further implementing the dominant market position of the State Owned Enterprises.

Third, to focus on supply-side reforms to establish a complete operational guideline that enables SOEs to become stronger and better.

Fourth, to be firm in preventing the loss of state-owned assets and to build a monitoring and evaluation system.

The article also quoted directions that Xi Jinping gave during the 19th Congress on SOEs. Xi called for SOEs to improve an asset management system, optimize the economic model, make structural adjustments and strategic changes, enable SOEs to become stronger and better and grow to be competitive first class world companies.

Source: People’s Daily, August 1, 2018