China's newly founded state-owned assets commission will supervise
and manage assets worth 6.9 trillion yuan (US$833.6 billion), the
commission's director, Li Rongrong, told a press conference
yesterday in Beijing.
On
behalf of the central government, the state-owned Asset Supervision
and Administration Commission, or SASAC, will supervise 196
companies that own a total of 6.9 trillion yuan in assets and
represents 2.5 trillion yuan of owner's equity right.
But financial assets, including those in China's top four banks,
won't fall under SASAC's control, the commission said.
The commission shoulders responsibilities from several government
bodies, including the former State Economic and Trade Commission
and the Ministry of Finance.
"Previously, too many ministries said they were responsible for
state-owned enterprises but no one took responsibility" when things
went wrong, said Huang Yiping, a Hong Kong-based economist for
Citigroup Inc. SASAC "will ensure there's more supervision on the
behavior of managers."
The commission appoints, removes and evaluates executives of
state-owned companies.
"The founding of the SASAC separated the owner and managers of
state-owned properties," Li said. The com-mission, as investor
responsible for assessing managers' performance, would penalize or
even dismiss managers responsible for losses from state-owned
enterprises.
In
the past, losses and low profits from state-owned properties were
mainly due to the non-separation of fund providers and management,
and policy-makers failing to shoulder their responsibilities, Li
said.
Among the nine areas of its missions, Li listed "develop and
perfect" relevant laws and regulations as the first.
The country will soon put into force a tentative Statute on the
Supervision and Administration of State-owned Assets of
Enterprises, Li said.
The commission also plans to close down all state-owned enterprises
that are considered bankrupt according to government criteria over
the next five years.
The strengthening of the central government's supervision of
state-owned companies and assets may prompt some local governments
to accelerate the sale of properties to private investors lest they
fall under the new ministry's control, analysts said.
"We are aware of this problem," Li said. "We will hold local
ministry offices responsible for loss of state property" under
their supervision.
China wants to create about 50 large state-owned companies that are
competitive globally, Li said.
(eastday.com May 23, 2003)