China will introduce assets management companies as platforms to push forward the restructuring of state-owned enterprises (SOEs) next year, a senior Chinese official said in Beijing Thursday.
"The conditions for establishing assets management companies have matured in China," Li Rongrong, director of the State-owned Assets Supervision and Administration Commission (SASAC), said at a press conference.
According to Li, the property rights of SOEs have been clarified, and the perfection of corporate governance in SOEs has made fresh progress, which creates an environment for the effective operation of assets management firms.
In addition, SASAC has finished drafting the general plan for SOE restructuring and state-owned asset distribution, and assets management companies will take charge of the implementation.
Two central SOEs were appointed by SASAC as trial assets management companies, Chengtong Group in June and State Development & Investment Corp in December. They have begun taking over loss-making SOEs.
The companies, which acquire and swap assets with central SOEs' branch businesses, bad performing affiliates and non-performing assets, will provide a platform for ongoing SOE restructuring and merging. New models of assets management will also be explored, Li acknowledged, without clarifying whether new trial companies will be added.
Next year, SASAC will formally formulate a budget system for state-owned capital operation among central SOEs to collect operational income. Whether the two trial companies will become platforms to deal with the income will hinge on future circumstances, Li said.
Reform will also focus on transforming the wholly state-owned firms into joint-stock ones and on further improving their corporate governance, including issuing a stock-stimulating system for SOE managerial personnel next month, he said.
A SASAC official disclosed that, according to the measure, 30 percent of the annual salary of managers in domestic listed SOEs will be paid by the stock of their firms, and 40 percent for managers in overseas listed ones.
(Xinhua News Agency December 22, 2005)
