Economy

SASAC to step up listing of central State-owned firms

By Bao Chang (China Daily)
Updated: 2010-12-14 09:52

BEIJING - The State-owned Assets Supervision and Administration Commission of the State Council (SASAC) has vowed to accelerate the listing of group companies of central government-invested State-owned enterprises (SOEs).

The move is part of an effort to institute a stockholding system and establish a modern corporate management structure in central SOEs.

"Forty out of 120 central SOEs will accomplish complete listing next year, as becoming standard joint-stock companies has already been the tendency for SOEs," local media cited Ji Xiaonan, head of the supervisory committee at SASAC, as saying.

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Ji said in order to better develop in the capital market, central SOEs should accept the oversight of the market over their entire groups instead of only their listed arms.

According to SASAC, 24 of 120 central SOEs were listed wholly as groups on the stock market by the end of July.

"Listings of group companies will encourage China's central SOEs to invigorate their business with transparent and modern management," said Zhang Yansheng, a senior researcher on trade at the National Development and Reform Commission.

"To maintain the sustainable development of the entire country, China's central SOEs are supposed to apply modern business management like a joint-stock structure, as they are the major driving force of China's economy," said Cheng Gong, a partner at Beijing-based Anbound Consultancy Group.

Cheng said the listing of group companies will also provide central SOEs with financing, supporting their long-term development when banks are tightening access to credit.

SASAC has made great efforts to restructure and reform China's central SOEs in recent years to establish a market-oriented mechanism for these corporations, some of which have grown into international giants.

SASAC plans to reduce the number of central SOEs from 120 to between 80 and 100 over the next few years to ensure the rational deployment of State-owned assets.