On Monday as part of an ongoing drive to improve the efficiency
with which state funds are used, China published a list of seven
sectors critical to the national economy and in which public
ownership is considered essential.
The sectors are armaments, electrical power and distribution,
oil and chemicals, telecommunications, coal, aviation and shipping,
according to the State Assets Supervision and Administration
Commission (SASAC).
"State capital must play a leading role in these sectors which
are the vital arteries of the national economy and essential to
national security," said Li Rongrong, minister in charge of SASAC.
"The Chinese government will inject more capital into large
state-owned enterprises (SOEs) in these priority sectors, optimize
their structure and make them more competitive," said Li.
More than 40 of the 161 large SOEs supervised by the SASAC are
engaged in these sectors. Their total assets account for three
quarters of all central SOEs and they rake in 79 percent of the
profits.
"In electrical power and distribution, oil and chemicals,
telecommunication and armaments central SOEs should either be
solely owned by the state or else the state should have a majority
shareholding," said Li.
"In the coal, aviation and shipping industries the state must
always have a controlling stake in central SOEs," he said. "Central
SOEs engaged in the downstream oil and chemical sector and in
value-added telecom services can continue to bring in private or
foreign capital to boost vitality," added Li.
To reorient state capital away from non-critical areas to
priority sectors the SASAC say China would reduce the number of
central SOEs by at least one third to between 80 and 100 before
2010 through mergers.
Social security and re-employment issues would be properly
addressed when non-performing SOEs were closed, the SASAC promised.
"China aims to build between 30 and 50 large, internationally
competitive companies by 2010," Li said.
According to statistics released at a press conference Tuesday,
profits of China's 161 SOEs reached 688.77 billion yuan in the
first 11 months of the year. This is up 18.9 percent over the same
period last year. The total profit of central SOEs is expected to
reach 720 billion yuan (US$92.3 billion) in 2006.
(Xinhua News Agency December 19, 2006)