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SOEs asked to focus on core business
China's State assets watchdog urged the country's large State-owned enterprises (SOEs) to focus on their core business and speed up shareholding system restructuring to become more globally competitive. State-owned assets should be focused on the most important sectors that concern the economy's lifeline instead of being scattered in too many side businesses, said Li Rongrong, chairman of the State-owned Assets Supervision and Administration Commission (SASAC), at a Beijing press conference yesterday. Authorities will support more large SOEs to list their core businesses in the stock market after reshuffles, he said. The 20-month-old SASAC is acting on behalf of the State as principal investor in more than 180 of the largest SOEs in China. It has also led nationwide reforms of the State-owned asset management systems to improve the sector's efficiency. The commission released the list of core businesses of 49 central SOEs yesterday. These enterprises, flagships of the key industries like power, oil, iron and steel, telecommunications and the military, are required to concentrate on their major businesses and withdraw from the minor businesses they used to operate. The remainder are expected to follow suit next year. Earlier this year, SASAC had already asked most of the central SOEs to transfer their real estate businesses to real estate enterprises as part of restructuring. This is to increase the efficiency in the use of resources, said Li. Meanwhile, such enterprises should also further their restructuring to become shareholding companies with standardized corporate governance. The State will maintain control in a few key sectors, while in many other competitive sectors, foreign and domestic private investors can buy into SOEs, said Li. Moreover, the authorities will also encourage more central SOEs to seek overseas listings to catch up with international standards. When asked if such a plan will leave domestic investors fewer chances to buy stocks in top companies, Li said that some of the big SOEs would actually return to domestic markets after listing overseas, which will still offer domestic investors investment opportunities. For those already listed in the Chinese market, Li said they still have the obligation to serve the interests of both major shareholders and minority investors. Going public is not just to raise money. "They need to care more about the small investors and increase communication," he said, adding that regular dividend payments are also necessary to expand long-term investor confidence. Li also told reporters at the sideline of the conference that there is no timetable for the sell-down of State holdings in listed companies. "We have not come to a consensus on the matter," he said,"We are still looking for an appropriate way to do it." Li also admitted that some problems still exist in management buy-outs and in the selling of State assets during the reforms in recent years, especially at the county and city levels. To curb the irregularities, the authorities will clarify the responsibilities of local State assets supervisory agencies and enhance relevant supervision. And SASAC, together with several government departments, has jointly launched inspections in August on the transfer of State assets and equities in 21 provinces and municipalities. |
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