China Media Group:
I would like to know how centrally administered SOEs have resumed production and operation so far. On the whole, how much impact does the epidemic have on the development and operation of these enterprises? Under the influence of the epidemic, will the production and operation goals and reform tasks of centrally administered SOEs set at the beginning of the year be adjusted? Thank you.
Ren Hongbin:
Thank you for your question. SASAC will not change the production and operation goals and reform tasks of centrally administered SOEs set at the beginning of the year. Regarding the resumption of production and operation, we believe that the resumption is an important guarantee to effectively curb the COVID-19 epidemic and maintain a stable economic operation. Under the guidance of SASAC, while guaranteeing their own epidemic prevention work, centrally administered SOEs resume production in an orderly manner according to their respective industries, making every effort to secure market supply and social stability in key sectors. According to preliminary statistics, over 80 percent of more than 20,000 major subsidiaries of centrally administered SOEs, which are mainly engaged in manufacturing, have resumed work. Those which do not resume production are because they still have no condition for production due to the severe epidemic situation. The work resumption rate for industries such as petroleum, petrochemicals, communications, power grid and transportation has exceeded 95 percent, and some sectors even have been in full run.
Here, what I want to particularly emphasize is that actually some enterprises have maintained operation throughout the Spring Festival holiday and the fight against the epidemic and never stopped their production, playing an important role in preventing and controlling the epidemic and maintaining economic stability.
As for the impact of the epidemic on the operation and development of centrally administered SOEs, I would like to introduce the following points:
First, the epidemic has indeed affected production and operation, and the impact on certain industries is relatively large. According to reports from centrally administered SOEs, because the epidemic broke out during the Spring Festival holiday, its impact in January was relatively controllable but becomes prominent in February. Due to the outbreak of the epidemic, aggregate demand of the whole society shrinks, resulting in immediate and severe impact on direct-to-consumer enterprises at the terminals of the industrial chain. For example, airlines are heavily affected by large-scale flight suspension and refunds during the Spring Festival peak season. From January 20 to February 13, three major airlines refunded 13 million tickets and cancelled 78,000 flights, with load factor and daily aircraft utilization rate dropping by nearly half. Usually, the Spring Festival holiday would see booming tourism and a peak time for airlines. A sharp drop in a peak season underlines the impact. Many tourist companies have shut down scenic spots, hotels and retail outlets, leading to great losses on their business. For example, China Tourism Group has closed 30 scenic areas, 19 hotels and 113 tourist retail stores as well as all cruise services. Overseas Chinese Town Co., Ltd. has shut down 74 scenic spots, seven amusement parks and ten travel agencies. We can see great impact on these companies.
Second, we believe that the impact of the epidemic is short-lived and temporary. General Secretary Xi Jinping said many times that China is a big country with great resilience, potential and leeway. The epidemic won’t change China’s economic momentum for growth in the long run. As for centrally administered SOEs, its impact mainly concentrates on the several sectors I just mentioned. We believe that as the epidemic is controlled and eventually eliminated, demand in these sectors will definitely rebound and gradually return to normal.
Third, we will stick to our goals with strong determination and confidence. You just asked whether we would change our goals and slow down our steps of reform. My answer is "no." SASAC alongside centrally administered SOEs will resolutely implement the goals and tasks set by the CPC Central Committee with Xi Jinping at its core. Sticking to our goals and tasks, we will spare no efforts to complete them even though with great pressure, providing strong support for the national economy to run smoothly. Certainly, it is a huge challenge to achieve our preset goals, which needs us to make greater efforts.
Specifically, we need to take the following measures: First of all, centrally administered SOEs should take the lead in resuming work and production, devoting full energy to maintaining stable production and operation. Second, we need to strengthen researching before make a judgment by analyzing the situation of industries and the value chain involving centrally administered SOEs and enforcing forecast and early warning so as to enact response measures in a timely manner. Third, we need to be ready for a tight budget by cutting cost and reducing expenditure as well as increasing work quality and efficiency in an effort to maximally offset the losses caused by the epidemic. Fourth, SASAC will guide enterprises in making full use of the favorable financial and tax policies launched by the state to combat the epidemic, seizing the possible opportunities brought by recovering market during the epidemic and after the end of the epidemic, and optimizing structure to stabilize production. Thank you.
