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Central SOEs urged to push upgrading

State-owned firms to roll out digital transformation initiatives across sectors

By ZHONG NAN | CHINA DAILY | Updated: 2025-12-25 07:14
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State Grid employees work on power transmission lines in Mingguang, Anhui province. ZHENG XIANLIE/FOR CHINA DAILY

China will push its centrally administered State-owned enterprises to pursue both the upgrading of traditional industries and the development of emerging sectors in 2026, as part of efforts to support overall economic growth and better serve public needs, the country's top State assets regulator said.

Speaking at a meeting of heads of central SOEs held in Beijing earlier this week, Zhang Yuzhuo, chairman of the State-owned Assets Supervision and Administration Commission of the State Council, or SASAC, said the government will continue to sustain momentum in key fields such as new energy, electric vehicles, new materials, aerospace, the low-altitude economy, quantum technology and 6G next year.

Zhang said that the SASAC will foster and expand new consumption scenarios in areas including culture and tourism, the digital economy and healthcare to cultivate new growth drivers and underpin overall economic development.

Backed by advances in artificial intelligence, central SOEs will roll out a new round of digital transformation across a wide range of sectors, while accelerating the tiered development of smart factories.

"These efforts will be accompanied by continued investment in technological upgrading and large-scale equipment upgrades, as well as more rigorous energy-saving and carbon-reduction retrofits in key industries, to speed up the overall transition," he added.

At the same time, policymakers will promote more integrated development models, encouraging companies to move from pure manufacturing toward integrated manufacturing-and-services operations, and to upgrade service activities from labor-intensive to knowledge-intensive segments.

Zhang said that strategic and specialized restructuring, and high-quality mergers and acquisitions will also be advanced to strengthen central SOEs' competitiveness and efficiency in 2026.

As the government has sharpened its focus on the real economy and core business activities, and moved to optimize the structure and allocation of State-owned assets this year, resources have increasingly been channeled into areas related to national security, critical sectors of the economy and essential public needs, according to the commission.

For example, strategic and specialized restructuring has continued this year, marked by the establishment of China Yajiang Group Co Ltd and China Changan Automobile Group Co Ltd, alongside asset integrations in power batteries by China FAW Group Corp and cruise operations by China Tourism Group, improving the efficiency of resource allocation.

During the 14th Five-Year Plan (2021-25) period, central SOEs invested more than 5 trillion yuan ($711 billion) in research and development, delivered a steady flow of major innovation breakthroughs, and posted average annual investment growth of over 20 percent in emerging industries, said the SASAC.

Over the same period, the government carried out six strategic restructurings involving 10 central SOEs, and established nine new groups with different functions.

China Changan Automobile Group, one of three centrally administered State-owned automotive groups, was established in July through a restructuring of the former Changan Automobile and some other companies.

Building on the production base of its predecessor operations, the group saw its 30 millionth vehicle roll off the production line early this month, just over four years after reaching the 20 millionth milestone.

Zhu Huarong, the group's chairman, said that in addition to expanding sales in overseas markets, the Chongqing-headquartered group will step up its transition toward electrification, connectivity and intelligent systems in 2026.

Chen Wenjian, chairman of China Railway Group Ltd, a Beijing-headquartered railway and infrastructure project contractor, said the central SOE will sharpen its focus on integrating technological and industrial innovation to strengthen core competitiveness during the 15th Five-Year Plan (2026-30) period.

"We will focus on upgrading traditional sectors rather than simply expanding capacity," said Chen. "In the construction business, this means accelerating a shift toward smarter, greener and more integrated models, with artificial intelligence deployed to deliver practical, scenario-based applications across our projects."

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