38 BEIJING REVIEW FEBRUARY 13, 2020 http://www.bjreview.com
BUSINESS
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very January, Chinese central state-owned
enterprises (SOEs) hold dozens of work
conferences to map out plans for the new
year. Employee stock ownership, mixed-owner-
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are the buzzwords at this year’s meetings.
ChemChina and the Sinochem Group,
two central SOEs, announced the merger
of their agricultural assets on January 5. The
move is expected to not only integrate the
two SOEs’ industrial chain, but also change
the landscape of China’s agricultural and
chemical industry.
China Electric Power Research Institute
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owned electric utility company State Grid,
started a dividend policy in 2017, a year after
the government issued a document to encour-
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related areas.
“The incentive stabilized the researchers as
the retention rate of core talent has increased
to 98 percent since 2018,” Wang Jiye, Vice
President of CEPRI, said. “The earnings are cor-
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to generating new technologies.”
Employee stock ownership has been
initiated in mixed-ownership enterprises, with
government capital holding the majority shares
and employees purchasing equity and pledg-
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corporate development. Thus, the SOE salary
system has been stably optimized since income
is now associated with productivity and eco-
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These measures are medium- and long-
term incentives that SOEs adopted to stimulate
endogenous power as part of overall SOE
reform. In recent years, SOE reform has made
consistent progress. In 2019, the net margin of
central SOEs was 1.3 trillion yuan ($185.2 bil-
lion), up 10.8 percent year on year.“Reform is of critical importance to enhance
the vitality of micro entities and strengthen
SOEs,” Hao Peng, Director of the State-
Owned Assets Supervision and Administration
Commission ( SASAC) of the State Council, said
at a conference held on January 14-15, adding
that in recent years, SASAC has implemented
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central SOEs.Bearing fruits
Along with incentives, mixed-ownership reform
has become a breakthrough for SOE reform.
“Performance has improved tremendously
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mixed-ownership reform,” Zhu Kebing, chief ac-
countant of China Unicom, one of China’s three
state-owned telecommunications operators,
said.
He added that reform has allowed the
integration of different types of capital and has
created a checks-and-balances ownership.
From the perspective of the business sector, re-
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promoting the company’s business transforma-
tion. In the first three quarters of 2019, China
Unicom’s industrial Internet revenue saw a
40-percent growth.
According to SASAC, newly added central
SOEs with mixed-ownership, including their
branches, surpassed 1,000 in 2019, while more
than 150 billion yuan ($21.4 billion) of social
capital was introduced through the capital and
property rights markets.
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70 percent of central SOE subsidiaries achieving
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Reorganization and integration also play
a significant role in SOE reform. Li Mingxing,
Director of SASAC’s research center, said they
are important measures to accelerate the struc-
tural adjustment of the state-owned economy
and realize high-quality development. It is an in-
evitable requirement to strengthen and expand
state-owned capital and cultivate world-class
enterprises.
Forty-one central SOEs have reorganized
and integrated their companies since the 18th
National Congress of the Communist Party of
China in 2012, adopting various means.
For example, shipbuilding giants China
State Shipbuilding Corporation and China
Shipbuilding Industry Corporation merged in
November 2019, establishing the trend of large-
scale central SOE mergers after two previous
cases.
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to a cold winter for the global shipping indus-
try. And despite the recovery in the past two
years, the situation is not optimistic. Mergers
and reorganizations in shipbuilding compa-
nies have become an international trend,” Li
Jin, chief researcher at the China EnterpriseA Transcript
Of Reform
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recent reform measures By Zhang Shasha
Workers of FAW Co. Ltd., a central SOE, inspect vehicles at an assembly factory in Changchun, capital city of Jilin
Province in northeast China, on April 9, 2019
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