Hong Kong Bauhinia Magazine:

Last year, the central authorities released a three-year action plan for deepening and upgrading the reform of state-owned enterprises (SOEs). This year marks a critical year to implement the action plan across the board. How will Shanxi effectively advance this major reform? Thank you.

Jin Xiangjun:

Thank you for your question. I'll invite Ms. Zhao to answer this question. 

Zhao Hongyan:

SOEs serve as the main force driving Shanxi's high-quality development and all-round transformation. Following the arrangements of the central authorities, we thoroughly implemented the action plan to deepen and upgrade the reform of SOEs last year, further improving both the quality and efficiency of enterprises' development. The net profit of the provincial enterprises increased by 4.78% year on year, while the net profit attributable to parent companies grew by over 25%, with the profit-to-cost ratio and other indicators hitting their best levels ever. As Mr. Jin just mentioned, some major indicators show that our provincial enterprises rank among the top nationwide. As said in the question, this year marks a critical year to promote the reform of SOEs on all fronts. Therefore, we will strive to deliver in the crucial move of reform with a focus on three respects. 

First, we will focus on enhancing SOEs' core functions , improving the layout of the state capital, and promoting accelerated efforts in three areas. Specifically, we will accelerate our endeavors to make traditional industries higher-end, smarter, and more eco-friendly, to plan for the new fields of strategic emerging industries and future industries, and to ensure security in key sectors such as coal, electricity, water, gas, and food. For example, our provincial enterprises have established 71 smart coal mines now, with advanced coal production capacity exceeding 90% of the total coal capacity. This year, we will build 67 more, aiming for full coverage by the end of 2027. In addition, we have launched initiatives to promote strategic emerging industries and improve their investment and revenue ratio, developing more "green mines" and "lighthouse factories." All these efforts have been made to serve the country's most fundamental interests, the province's most important plans, and the public aspirations.

Second, we will focus on enhancing SOEs' core competitiveness with the dual drivers of sci-tech innovation and value creation. Bearing in mind that enterprises play a principal role in sci-tech innovation and focusing on the development of new quality productive forces, we have implemented a project to promote sci-tech innovation of our provincial enterprises, conducting classified, case-by-case assessments for the first time. As a result, the share of our enterprises' R&D spending in GDP has increased by over 9% annually on average, and the development of 14 original technology sources as demonstration examples has been advanced. The five key national laboratories and provincial labs, including the Key National Laboratory for Intelligent Mining Equipment Technology of Taiyuan Heavy Machinery Group Co., Ltd ., have been fully leveraged, securing a number of landmark achievements at a faster speed. Meanwhile, based on the principle of putting quality first and giving priority to performance , we have intensified efforts to create the "Coking Coal Evaluation Standard" for Shanxi coking coal and develop Fenjiu into the "Soul of Chinese Liquor" brand. In this way, we aim to guide enterprises to place greater emphasis on standards, branding, and business forms and models that can better reflect the underlying momentum and development potentials for long-term value creation. 

Third, we will focus on building modern new SOEs and prioritize the "five emphases." After years of reform, provincial enterprises in Shanxi have been strategically reorganized from 35 to 18. Next, the key is giving full play to the "1+1>2" effect. We will promote better corporate governance systems and better modern corporate systems, and make enterprises' main responsibilities and main businesses more prominent. We will improve the efficiency of market-oriented operating mechanisms, and boost internal momentum for development. We will continue to deliver reform benefits and accelerate efforts to help our enterprises get stronger, do better and grow bigger. Thank you.