Shao Ning, a vice director of the State-owned Assets Supervision and Administration Commission (SASAC) said at the recent 2008 China Defense Industry Capital Forum that state-owned companies should step up efforts to list their high-performing sectors on stock markets to raise capital.
Shao Ning, a vice director of the State-owned Assets Supervision and Administration Commission (SASAC) said at the recent 2008 China Defense Industry Capital Forum that state-owned companies should step up efforts to list their high-performing sectors on stock markets to raise capital.
Shao said that stockholding system reforms had helped companies in the defense sector gain ground over recent years. He cited more than 50 companies controlled by the domestic defense industry that had gone public on overseas stock markets, and noted that others are in line to do the same.
However, the current situation is challenging for the reform process. Firstly, the management structure of state-owned companies still leaves much to be desired. Secondly, with the global financial crisis and looming recession, state-owned enterprises are facing increasing uncertainties and difficulties.
"We should not underestimate the current difficulties," said Shao, "but further integration is what we need, especially in some key areas."
He said the first step is to push for reform of the stockholding system by diversifying investing bodies and property rights. As for state-owned parent companies, listing on stock markets and introducing strategic investors can bring in significant help from outside.
"Apart from a handful of industries that will remain off-limits to foreign or private capital, central government enterprises should transform themselves into shareholding companies," he said.
He said that SASAC will step up its efforts to restructure and streamline large state-owned enterprises. By 2010 the number of central enterprises will have been pruned to between 80 and 100, among which 30-50 companies are expected to become internationally competitive.
(China.org.cn by He Shan, October 31, 2008)
