The China Commission for Managing State Properties, the new manager of China's state assets, set to work on May 22. On the subjects of how to protect state assets and whether to resume selling shares of listed state-owned enterprises (SOEs), People's Daily recently interviewed the commission head Li Rongrong.
Reporter: Reform in the past 20 years shows that in order to keep and increase the value of state assets, government should strengthen the supervision and examination of SOE management. What does the commission plan to do?
Li Rongrong: To keep and increase the value of state-owned assets, our commission must quickly set up a feasible enterprise performance check-up system which manages state assets, personnel and enterprise operations.
As the owner we will also set up another appraisal system of SOE management. The system includes indicators like finance status, enterprise operation, debt repayment and enterprises potential.
In the first step, we plan to select several basic indicators to review the operations of these SOEs, and try to perfect the appraisal system later. Now, we are asking for opinions of all aspects and begin trial operations in some enterprises. Whatever, the system will be popularized next year.
Reporter: What do you say about the fact that local government is speeding up the selling of state assets?
Li Rongrong: The Ministry of Finance has issued a circular to stop the selling of state assets. We will strengthen instruction and supervision on the local commissions for managing state properties, and punish related executives once state asset losses occur.
One important task of our commission is to boost the liquidity of state assets, and adjust its allocation and structure. When selling or transferring these state assets, we should keep the deal transparent, just and reasonable in order to prevent further losses. As the representative of state assets, our commission should strengthen management in approval, asset pricing and dealing. Therefore, we will begin our work in four areas.
First, propel the construction of the equity market, and let the market force decide the price of state assets.
Second, set up related regulations on equity trade. The State Council is drafting related laws; our commission will also put forward regulations.
Third, we should set up the equity trade monitoring network, which will use information technology to monitor the state assets transfer and trade. The nationwide network will trace equity transfer and detect problems by focusing on modification registration, logout registration, and evaluation records.
Fourth, set up a supervision mechanism. The commission, together with other government departments, will enhance supervision on equity trade and other intermediaries, find, correct and punish those violators.
Reporter: Will government continue to sell state-owned shares in the short term? If so, will government sell them on the stock market as before?
Li Rongrong: It's right to supply social security funding by selling shares of listed state-owned enterprises. It will adjust the allocation and structure of state-owned enterprises, improve the modern enterprise system and facilitate the establishment of social security network. Meanwhile, the state share sale program is still exploring its work, for domestic capital market is just starting, the legal system and market mechanism need further improvement. The shares of listed companies can be divided into traded and non-traded ones. Therefore, the widely accepted state share sales program will not be active for some time.
However, for these overseas listed companies, they still need to sell state-owned shares equaling 10 percent of raised funds, and revenue should be handed to the National Social Security Fund. Statistics show that overseas listed companies, by selling state-owned shares, collected social security funding of 9.885 billion yuan (US$1.19 billion) in 2002.
(China.org.cn translated by Tang Fuchun, June 16, 2003)
