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Large state-owned enterprises (SOE) will be the focus of the next step of reforms, said an official from China's state-owned assets watchdog Tuesday in Beijing.
During the 2004 international forum on Chinese enterprises going global, Shao Ning, vice-chairman of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), said the new direction of the reforms is in line with the government's strategy for large enterprises and consortiums.
In the next stage, China's reform and development tasks will be more closely combined, Shao said. Large SOE reform is one part of the process that is not fully settled, he said.
"For a long time it has been unclear who should be the investor in State-owned assets, so it is very difficult to launch and deepen a series of critical reforms."
Compared with transnationals, China's large enterprises still lag behind in terms of management, marketing, technical development and product innovation, Shao said.
Most of these large enterprises are state-owned. The problems of imperfect governance structure and improper internal systems have yet to be addressed, he said.
Shao said the biggest problem in these enterprises is institutional, which means there is no reliable foundation for the development of large enterprises.
The SASAC believes that the key points are institutional innovation, modern corporate systems, diversified property rights through stock-holding systems and regularized corporate governance structures.
"Therefore, the next task for SASAC is to gradually strengthen the institutional and structural innovation, so that the development of large SOEs is based on a reliable institutional and optimized structure," Shao said.
He said that to take large SOEs one step further towards the international market, the SASAC will reduce a number of administrative approvals, set up the enterprise main body for investment, deepen institutional reforms of foreign-related economic management and provide the enterprises with more flexible environment and more convenient conditions.
(Xinhua News Agency May 26, 2004)
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