SOEs' new social roles
Updated: 2008-01-08 14:49
The State-owned Assets Supervision and Administration Commission (SASAC) recently published a guideline for central State-owned enterprises (SOEs) to carry out their social responsibilities.
In view of the conditions of Chinese enterprises, the State assets watchdog had highlighted three subcategories of social responsibilities. The obligatory responsibilities require full compliance of laws and regulations; the duty-bound responsibilities urge sound business performance; and the voluntary responsibilities expect high commercial ethical standards and more contributions to society.
Due to bold reforms to restructure and revitalize the State sector, major SOEs have taken on a brand-new look in terms of corporate management and profitability.
Latest statistics indicate that China's centrally administrated SOEs are expected to see annual profits jump by some 30 percent in 2007 on the back of a strong economy. Such sort of profit-making capability was just unthinkable a decade ago when many State firms were struggling for survival.
Admittedly, the huge benefits of improved business performance of the State sector to the country's fiscal growth and employment is obvious.
State firms are also attaching more importance to their social obligations. For instance, 11 central SOEs have issued social responsibility reports so far since CSR (corporate social responsibility) had for the first time been fully recognized either by law or by government policies in 2006.
However, in addition to these achievements on CSR, China's SOEs have yet to fulfill some key tasks that are of great social significance.
One is their payment of dividends to the State.
When they suffered from losses a decade ago, the government invested hugely to boost their competitiveness. It is high time for profit-making SOEs to pay capital gains to meet the country's needs for public funds for social welfare like education, healthcare and pension insurance.
Another role for major SOEs is to help break the monopoly that hinders industrial development and affects the interests of consumers.
Though central SOEs have become the undisputable backbone of the national economy, their expansion should not come at the cost of the overall efficiency of the market as well as consumers' welfare.
At present, more than half of the profits central SOEs have made still come from a few companies in sectors of the State monopoly. Media reports of exorbitant wages in these sectors often ignited public resentment.
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