The National Audit Office (NAO) has beefed up its scrutiny of overseas state-owned assets with the establishment of a new department specializing in auditing the sector.
The move is part of the central government's efforts to improve management of its overseas state assets and rein in fraud reported in the sector in recent years.
During its recent restructuring, the NAO established the new department to supervise the financing of overseas units of government departments, and audit state-owned companies, firms in which the state has a majority shareholding and financial institutions, China Securities reported on Monday.
An official with the NAO said yesterday that its auditing of overseas state assets was relatively weak prior to the establishment of the new department.
The official, who declined to be named, said that only the foreign affairs department of the NAO had been responsible for "organizing and coordinating auditing of overseas government units, enterprises and programs".
Establishment of the new department shows that the government is strengthening its supervision of overseas sate assets, estimated at over 100 billion yuan (US$14.8 billion) by experts.
"Overseas state assets have snowballed in recent years along with domestic economic growth, yet supervision and management remains lax," said Li Shuguang, a law professor at China University of Political Science and Law.
Li said the government lacks a clear picture of the total amount of overseas state assets due to "messy management".
The state-owned Assets Supervision and Administration Commission, the country's state assets watchdog, is the major supervisor of overseas assets. The total amount of state-owned assets topped 12 trillion yuan last year, with a considerable amount belonging to overseas branches, said Li.
More than 80 central government ministries and agencies have assets overseas, but "no one knows their exact number or scale", Li told China Daily.
Many state assets have been lost due to the government's failure to get an overall picture of the country's state-owned assets abroad and the unrestrained power of officials in these businesses, Chen Changzhi, former vice-minister of supervision, said earlier.
In one case, Singapore-listed China Aviation Oil declared losses of $550 million in 2004 from risky oil trades and speculative trading and had to seek court protection from creditors in Singapore's most serious financial scandal in nearly a decade.
Chen proposed the drafting of laws on overseas direct investment and regulations on the management of Chinese firms operating overseas to beef up the supervision of state-owned assets in these businesses.
The government has already taken a series of measures to improve the management of its overseas state assets.
China last year launched an across-the-board overhaul of its overseas state-owned assets, involving more than 1,000 central state-owned enterprises and their businesses abroad.
(China Daily?August 21, 2008)
