ThePaper.cn:

Mixed-ownership reform is one of the priorities of SOE reform. What efforts have been made in this regard since the 18th CPC National Congress? How effective are they? What measures will be adopted in the future? Thank you. 

Peng Huagang:

Thank you for your questions. Since the 18th CPC National Congress, the SASAC has been resolved to implement the decisions and deployments made by the CPC Central Committee and the State Council. In accordance with the overall requirement of improving governance, strengthening incentives, highlighting the main business, and raising efficiency, we have endeavored to advance mixed-ownership reform in an active yet steady way and facilitate diverse forms of ownership to learn from each other and stimulate one another for common development. We have stepped up efforts in the following aspects:

First, we have coordinated efforts to set the direction for mixed-ownership reform and exercise oversight on it. We have been committed to strengthening overall Party leadership in the whole process of the reform, adhered to the basic economic system, and worked unswervingly both to consolidate and develop the public sector and to encourage, support and guide development of the non-public sector to ensure that mixed-ownership reform steers in the right direction. We have fully demonstrated the necessity and feasibility of mixed-ownership reform in accordance with functional orientations of every enterprise. We made targeted plans and policies for them, making sure that those plans and policies will not be implemented until they are demonstrated to be reasonable and mature. Moreover, we have strengthened supervision over the whole process of the mixed-ownership reform to effectively prevent the loss of state-owned assets. 

Second, we have continued to improve the system of mixed-ownership reform. We have stepped up efforts to improve the top-level design of mixed-ownership reform and formulated and launched more than 20 regulations and supporting policies, establishing a system that covers all links of mixed-ownership reform to strictly standardize key links and procedures of the reform. We have worked with related authorities to address the common difficulties in treating idle land, financial tax, and asset pricing, improve operational standards, remove the roadblocks and mitigate burdens for the reform.

Third, we have expanded market-based channels for attracting capital. We have endeavored to leverage the role of the capital market in allocating resources and set up a market platform that is fair, impartial, and open, in order to ensure that all transactions and transfers of state-owned assets will be carried out openly through the capital market. Since 2013, more than 2.5 trillion yuan of social capital has been introduced through reforms and restructurings of SOEs. Since 2019, the SASAC has worked with the All-China Federation of Industry and Commerce for three consecutive years to jointly hold the event on promoting the mixed-ownership reform of centrally-administered SOEs, which aims to boost synergies between central SOEs and private companies. The event has greatly facilitated in-depth mixed-ownership reform. More than 70 percent of centrally administered SOEs and 54 percent of local SOEs are now mixed-ownership ones. 

Fourth, we have stepped up efforts to deepen the reform of mechanism in a systematic manner. We have upheld systematic thinking and adopted a coordinated way to make sure that the mixed-ownership reform is more than just a mix, and given full play to advantages of integrated capital of mixed-ownership enterprises and encourage those enterprises to be vanguards and play an exemplary role in improving corporate governance and market-oriented operating mechanisms. In terms of strengthening the Party leadership, Party organizations have been established in the majority of the mixed-ownership enterprises where conditions allow. In terms of corporate governance, 70% mixed-ownership enterprises have directors from outside of the companies. State holding listed companies have continued to introduce those strategic investors with a shareholding ratio of over 5%, while their shareholding structure and corporate governance have been optimized. In terms of the market operation mechanism, all enterprises involved the mixed-ownership reform have basically achieved full coverage of managers' tenure system and contractual management. Medium- and long-term incentives have also been in place, with more than a hundred listed companies adopting equity incentives and 200 sci-tech enterprises adopting equity and dividend incentives. 

Thanks to mixed-ownership reforms, a large number of companies stand out for their outstanding major business, good corporate governance, strong innovation capacity, and high efficiency. Going forward, we will adhere to the principles of implementing mixed-ownership reform based on local conditions, specific industries and enterprises. We will adopt corporate forms of sole proprietorship, majority control, or equity participation only if conditions allow. We need to ensure that companies are not forced to merge. The reform does mean full coverage, and no specific timetable will be set. We will instead make active and prudent efforts to deepen mixed-ownership reform. In order to push ahead with mixed-ownership reform in SOEs by radically transforming the operating mechanism, we will ramp up efforts to help enterprises improve corporate governance structure and facilitate strategic investors to play their proactive roles so as to effectively protect shareholders' rights. We will also improve the flexible and efficient market-oriented operating mechanism, and promote the mixed-ownership reform to achieve substantial results. Thank you.