The State-owned Assets Supervision and Administration Commission (SASAC) reaffirmed yesterday that State-owned enterprises (SOEs) will continue joint-stock reforms - despite debates on whether such reform has led to the draining of State assets.

"The SOEs' quality as a whole has improved after years of efforts," said Li Yizhong, vice-minister of SASAC. "The reform of SOEs remains at the core of the entire economic reform."

However, the SOE reforms are a long process that need steady improvement and exploration. In recent years, lack of parallel regulations for the reform and uncertainty about the exact owners of State assets have brewed problems that have aroused public concerns and discussions.

Some even proposed a halt to SOEs' reform and the transfer of State assets' ownership temporarily, while some have suggested the withdrawal of the State economy from competitive sectors.

"These two types of opinion are one-sided and should be corrected," said Li. "As the reform continues, the proportion of the State capital in the overall national economy is expected to decline further, but the total quantity of the State economy should be increasing, and its quality improving."

Fifteen Chinese enterprises entered the Fortune Global 500 list in 2003, among which 14 were SOEs.

"SOE reform should enable State capital to flow in a rational way and put more of the capital into key economic sectors that concern national security and its backbone industries," Li said. "The asset restructuring should be conducted in fair market competition and a diversified manner, based on the actual conditions in different industries and regions."

(China Daily December 16, 2004)