China welcomes foreign enterprises in SOE mixed-ownership reforms

2018-03-13
cgtn.com

China welcomes all types of enterprises, including foreign ones, to participate in mixed-ownership reform of State-owned enterprises (SOEs), the State assets regulator said on March 10.

“We’ll be delighted to see foreign enterprises taking part in the mixed-ownership reform,” Xiao Yaqing, head of State-owned Assets Supervision and Administration Commission (SASAC), said at a news conference on the sidelines of the annual legislative session.

China is firm in opening up and pushing forward the mixed-ownership reform, Xiao said. The reform diversifies the ownership structure of SOEs and is considered an important part of SOE reform.

He pledged that the rights and interests of all investors participating in the mixed-ownership reform would be protected.

The SASAC has been assigned with multiple tasks. It wants to boost profits and cut debt, invest more in lighter industries like 5G and commercial aircraft, persuade foreign investors that SOEs have more autonomy, while also firm up the government’s role in decision-making.

It will continue the restructuring of State assets, merging similar SOEs.

Last year telecom giant China Unicom raised $12 billion from private investors like Alibaba and Tencent. But analysts say this didn’t shake up its shareholder structure, as the company already had private minority investors.

In what ways can mixed ownership benefit State firms? Zhao Zhongxiu, vice-president of International Business and Economics University, said that it will help improve the company governance, expand their core businesses and make them more diversified, because outside investments bring with them market experience and technologies.

According to Zhao, although many State firms are weighted by high leverage and debt, they are still attractive to outside investments, because their core businesses have dominated in their areas for years and still have the potential to expand. With investment form private enterprises and foreign companies, they can create new energy and explore the potential for future development.