Yicai:

Since last year, the State-owned Assets Supervision and Administration Commission of the State Council has been advancing a new round of initiatives to deepen and enhance SOE reform. As a major hub for SOEs, what measures has Jilin taken to deepen SOE reform? Thank you.

Hu Yuting:

Thank you for your interest in the development and reform of Jilin's SOEs. For Jilin to achieve a breakthrough in revitalization, SOEs must take the lead. In recent years, Jilin has made steady progress in SOE reform. With enterprises operating steadily and soundly, the quality and efficiency of development are consistently rising. However, when measured against the requirements of the central government's new round of SOE reforms and the goal of high-quality development, we still have a considerable amount of work to do. We are facing the issues head-on and are vigorously advancing our action plan to deepen and enhance SOE reform in order to strengthen core functions and improve the core competitiveness of enterprises. We aim to use two to three years to increase the assets of Jilin's provincial SOEs by 50%, doubling their revenue and profits and revitalizing Jilin's SOEs to restore their former strength.

First, we are promoting strategic restructuring and specialized integration of SOEs.. We are accelerating channeling stated-owned capital to strategic emerging industries like new energy, new materials and big data, concentrating on competitive sectors such as large-scale agriculture and tourism and extending into foundational, essential and livelihood-related areas. This approach aims to fully leverage SOEs' supportive roles in technology innovation and industrial security. Jilin is rich in forest resources, with us previously having two large forest industry groups. Due to homogenous competition, the resource advantage was not being fully utilized. Through our reform strategy of merging, integrating and harmonizing, we combined these two separate groups into a single forest industry group to strengthen core industries like ecological protection, product processing, under-forest economy, beverages and leisure resorts. By shedding non-essential businesses, the enterprise has seen sound operation, with substantial increases in revenue and profits this year.

Second, we are increasing the leading role of SOEs in scientific and technological innovation. We support SOEs taking the lead in integrating production, academia, research and application, forming innovation consortia, building platforms for the commercialization of scientific and technological achievements and expanding application scenarios. We have implemented elevated management for Jilin Chemical Fiber Group, coordinating provincial resources and establishing a carbon fiber research institute to tackle critical technologies. High-grade products have already achieved mass production, with expanded applications in aerospace, rail transportation, automotive lightweighting, sports equipment, household goods and other fields. Additionally, the downstream product industrial park is under construction. Currently, Jilin Chemical Fiber boasts the world's largest capacity for protofilament and China's largest capacity for carbon fiber, pressing ahead toward becoming a world-class innovative enterprise that uses special and sophisticated technologies to produce novel and unique products.

Third, we are optimizing governance system and enhancing core competitiveness. We are innovating the SOE oversight and evaluation system by implementing a target-based responsibility system for corporate leaders through their tenures. We are reducing the number of management levels in enterprises, optimizing equity structures and promoting enterprises to conduct reforms and improve their structures. By increasing governance efficiency and improving operational quality and effectiveness, we have restructured and consolidated 66 small and scattered provincial-level SOEs into 12 larger and stronger ones, reducing the number of firms by 81.8%. The levels within the companies have been decreased from five to three, with the total number of enterprises across all levels reduced from 826 to 542, representing a 34.4% decrease.

At present, we are making efforts to deepen and enhance SOE reform, and we expect that over the next several years Jilin's SOEs will regain their vitality. Thank you.