Cover News:

As indicated at the Central Economic Work Conference, China will deepen and upgrade its SOE reforms to strengthen their core functions and core competitiveness. 2023 marks the first year for China to implement the campaign for deepening and upgrading the SOE reform. Could you share with us the major progress since the campaign's launch and the future plans for advancing SOE reforms more effectively and substantially? Thank you.

Yuan Ye:

I'll take this last question. The three-year reform campaign from 2020 to 2022 has yielded positive results. The CPC Central Committee with Comrade Xi Jinping at its core has made the strategic plan of deepening and upgrading the SOE reform riding on the current positive momentum.

The latest round of SOE reform has distinctive characteristics of the era. Regarding the reform tasks, they can be broadly categorized into two main aspects. The first one refers to institutional reform, mainly aiming to consolidate the achievements made over the past three years of reform so as to realize the transition from a focus on quantity to a focus on quality. The emphasis is on breaking through some systemic and institutional obstacles that constrain the high-quality development of central SOEs and encouraging enterprises to genuinely operate in accordance with market-oriented mechanisms. The second task pertains to functional reform. It mainly involves the mission and responsibilities assigned by the new journey, focusing on the country's major needs. The goal is to continuously enhance the core functions and improve the core competitiveness of enterprises, effectively leveraging their roles of technological innovation, industrial control, and security support in the construction of a modern industrial system and the establishment of a new development pattern. 

The CPC Central Committee has made top-level designs for the new round of SOE reform, officially issuing the guidelines last year. The State Council has established a specialized work coordination mechanism and convened mobilization and deployment meetings to ensure comprehensive planning. Various regions, departments, and SOEs across the country have regarded the deepening and enhancement of reform as a vital political task. They are actively concentrating on practical measures, organizing support, and initiating the new round of reform with a commitment to a high standard and quality.

Currently, various regions and central enterprises nationwide have developed relevant implementation plans for the reforms. Related work is progressing steadily according to the schedule, and the effects are gradually becoming evident.

For example, in terms of optimizing the layout, over the past year, central SOEs have advanced strategic restructuring through market-oriented approaches, and have established a batch of new enterprises. Some 29 companies signed contracts for specialized integration projects in areas such as ecological and environmental protection, biotechnology, and intelligent connected vehicles. We have further promoted the optimization of resource allocation in this regard, as mentioned by Mr. Li just now. 

For instance, in the establishment of the modern enterprise system with Chinese characteristics, there has been further improvement in the operational standards of corporate boards. The development of external director teams has continued to strengthen, and the enforcement of managerial term limits and contractual management has been enhanced. The expansion and deepening of world-class initiatives such as "Dual Demonstration," "Scientific and Technological Innovation Action," and "Double Hundred Action" are underway, with exemplary enterprises effectively showcasing their leading role in these efforts.

In addition, in terms of improving supervision, we have revised the performance assessment methods for leaders of central SOEs. Specialized differential assessment methods have also been formulated for enterprises engaged in scientific research and design, heavy equipment manufacturing, grain reserves, and other areas. Furthermore, for companies aiming to strengthen technological research and development, promote the transformation of achievements, and develop strategic emerging industries, we have introduced a slew of targeted and effective support policies, striving to create a favorable environment for the high-quality development of enterprises.

This year is a crucial year for implementing deepened and enhanced reform actions, signifying the consolidation of past endeavors and the initiation of new challenges. SOEs will coordinate progress, ensure effective implementation, and strive to make breakthroughs in key and challenging areas. The key areas include the following aspects:

We will deepen reforms to optimize resource allocation. Focusing on serving major national strategies, we will further channel state-owned capital into crucial industries and key sectors vital for national security and the foundational aspects of the national economy. This entails concentration on public services, emergency capabilities, and areas of public welfare essential to the national economy and peoples' well-being. Furthermore, we will broaden our focus to cutting-edge strategic emerging industries. In our work, we will persist in implementing strategic restructuring and specialized integration, refine the budgetary allocation of state-owned capital, intensify efforts in the development of new industries and new tracks, promote the fundamental transformation of traditional industries, and increase the resilience and security of the industrial chain.

We will deepen reforms to enhance institutional mechanisms. On one hand, we will accelerate the refinement of a modern corporate governance system tailored to the characteristics of Chinese SOEs. This includes categorizing and optimizing the "pre-listed matters" of CPC committees (CPC leadership groups) to promote the scientific, rational, and efficient building of the board of directors so as to converting institutional advantages into developmental strengths. On the other hand, we will further improve market-oriented operational mechanisms, enhance the quality and scope of managerial term limits and contractual management, establish a precise, efficient, and orderly income distribution mechanism, and expedite the establishment of modern new SOEs.

We will deepen reforms to strengthen institutional guarantees. We will further clarify the rights and responsibilities of investors in regulatory matters, promoting centralized and unified supervision of operational state-owned assets, and better leverage the advantages of specialized, systematic, rule-of-law, and efficient supervision. We will further optimize the assessment system by implementing tailored evaluations for each enterprise and industry, and improving the precision, scientific basis, and consistency of policy provision. We will establish a coordinated and efficient system for supervising state-owned assets, effectively enhancing regulatory efficiency, safeguarding the security of state-owned assets, and fostering a favorable environment for the reform and development of enterprises.

Thank you.

Xie Yingjun: 

Thank you to all the speakers for the introductions, and also, thank you to all participating media friends. Today's press conference concludes here.

Translated and edited by Zhang Rui, Wang Qian, Xu Kailin, Yuan Fang, Li Xiao, He Shan, Liu Caiyi, Huang Shan, Wang Mengru, Zhang Junmian, Wang Ziteng, Liu Sitong, Zhang Tingting, Liu Qiang, Yan Bin, Wang Yiming, Guo Yiming, Qin Qi, Li Huiru, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.