CNR:

According to the information presented today, SOEs have made major achievements in economic effectiveness and quality of development. What do you think of the high-quality development of SOEs in recent years? What remarkable changes have SOEs made?

Weng Jieming:

Thank you for your questions. High-quality development is a prominent index to evaluate the outcome of SOE reform. SOEs have been playing a crucial role in boosting high-quality development and serve as a strong pillar of the socialist economy with the Chinese characteristics. Since the 18th CPC National Congress, the state capital and SOEs have strived for full and faithful implementation of the new development philosophy and firmly committed to a high-quality development path. Their achievements can be summarized in the following four aspects: 

First, we have always stuck to high-quality development. We have given full play to the role of business performance evaluation and set up a high-quality development indicator system based on "two profits and four rates." "Two profits" are total profit and net profit. "Four rates" are the profit margin of operating income, the asset-liability ratio, the research and development intensity (R&D intensity), and total labor productivity. These four indicators are very clear and show our focus on high-quality development. We will guide enterprises to effectively change their methods of development, shift the focus from pursuing the scale and speed of development in the past to improving the quality of development today, and strive to achieve high-quality growth on a solid footing.

Second, high-quality development has gained more momentum. We have given top priority to scientific and technological innovation, conscientiously implemented the strategy of innovation-driven development, and insisted on the principle of offering as much as we can and as much as we should. We have implemented a series of supportive policies, such as annual assessment bonus points, regarding R&D expenses as profit, capital injection, and separating total payroll. We adopted a mechanism of inspiring the most capable enterprises to undertake projects. We have also encouraged enterprises to step up innovation and activate their potential for innovation and creativity, thus gaining a large number of independent innovation achievements. It has provided SOEs a stronger impetus and momentum for development.

Third, the foundation of high-quality development has been more solid. Taking the deepening of supply-side structural reform as the main task, we strived to overcome the shortcomings that restricted high-quality development of SOEs. We have promoted strategic reorganization and professional integration with unprecedented intensity and sped up the disposal of assets that are outside the core business, lack competitive advantages, and are inefficient or ineffective. And we have completed the disposal of "zombie enterprises," basically stripped out social functions of the enterprises, and solved historical problems. These have increased enterprises' efficiency, enabled them to focus more on their main responsibilities and business to develop the real economy, and further laid a solid foundation for enterprises' high-quality development.

Fourth, the vitality of high-quality development has been fully stimulated. We have insisted on propelling development through reform, vigorously promoted market-oriented reform, and strived to build up a lean and efficient organizational structure. And we have fully carried out the fixed-term appointment system and contractual management for the members at the managerial level, and actively explored a professional manager system. We have further reformed three systems and promoted mixed-ownership SOEs to accelerate the transformation of operating mechanisms. We have implemented special reform projects, such as "double-hundred actions," "regional comprehensive reform experiments," and "scientific reform demonstration action." Thanks to the deepened reforms, mechanisms have been reinvigorated and improved, helping to regenerate a number of SOEs, and accelerate their growth.

A key mark for SOEs' achievements in high-quality development is their substantial steps in building a world-class enterprise. The development of the modern economy shows that a country will be strong if its enterprises are strong. To build a modern socialist country in all respects, we must build up world-class enterprises, which is also the strategic task of SOEs in the new era. The number of SOEs entering the world's top 500 increased from 65 in 2012 to 96 in 2021, covering shipbuilding, steel, energy, construction, water transportation, equipment manufacturing, and other sectors.

In general, significant progress has been made in state-owned assets and SOEs by implementing the new development concept and promoting high-quality development. We are more determined to further speed up the building of world-class enterprises. Thank you.