The Chinese government is expected to announce a new three-year action plan aimed at reforming the country's state-owned enterprises (SOE). Following a meeting by the Leading Group for State-Owned Enterprises Reform of the State Council on Tuesday, industry executives revealed the next day that the action plan for SOEs is apparently already in the works.
China's three-year action plan will reportedly include comprehensive measures that will deal with mix-ownership regulations, government subsidies, and measures to improve earnings domestically and internationally. The plan reportedly already has a clear timetable and road map, which means that it may be officially announced very soon.
Part of the plan will properly outline a clear mission and evaluation parameters for SOEs. This is aimed at better defining operations and enhancing overall performance for each SOE's business.
The proposed evaluation measures are meant to strengthen oversight and supervision of all SOE assets. Other measures such as an enhanced incentive mechanism will also be imposed. China hopes that this would further spur innovation within SOEs and boost overall productivity.
According to the chief researcher at the China Enterprise Research Institute, Li Jin, the central government is expected to roll out its action plan sometime in the first half of 2020. China will likely still need time to conduct preliminary studies on each of the governmental agencies before it can put its plan in place.
Prior to the revelation of the development of a new three-year action plan, the country's State-Owned Assets Supervision and Administration Commission had released new guidelines for SOEs regarding mixed-ownership regulations. The regulator of China's SOEs intends to standardize the process of mixed ownership, while also making reforms to transform the country's central SOE operations.
Executives of China's SOEs have expressed their enthusiasm over the reforms, stating that the new action plan should prove to be very useful in boosting each enterprise's earning ability. This can hopefully be achieved through the eradication of administration and monopoly roles, which should allow SOEs to better adapt to the changing market.
While most are open to the changes, some SOEs are reportedly still reluctant to participate in the planned reforms. It is apparently up to the government to make sure that its objectives and paths are clear and precise to hopefully sway everyone involved. According to the director of the corporate reform office of the state-owned power generating firm China Datang Corp, Li Yunfeng, some SOEs are likely reluctant because they simply don't fully understand the purpose of the planned changes.
