By Li Hongmei
The reform of China's state-owned enterprises will likely be one of the top issues to crop up at the upcoming third plenary session of the 18th Communist Party of China Central Committee, reported the Beijing-based China Economic Weekly.
The next goal for the reforms will be to make the state-owned enterprises (SOEs) market-oriented, the source said. Firstly, the enterprises have to move towards a company system and will be developed into companies that have a diverse portfolio of equities - except for the few enterprises that involve national security, national defense or act as an economic lifeline for the public, which will be allowed to function as wholly-owned enterprises.
Several experts said SOEs that were competing in the marketplace should be reformed first.
Gao Minghua, director of the Research Center of Corporate Governance and Enterprise Development at the Beijing Normal University, said "China's state-owned enterprises are located in widespread areas and across many sectors, and they have reached a critical stage of reform. The public has high expectations and the government should give up support for state-owned enterprises and let the state-owned and private-owned enterprises compete in a fair environment."
Zhou Fangsheng, a researcher at the Ministry of Finance, said he expects the upcoming meeting to set the tone for SOE reforms. "The direction of the state-owned enterprise reform is market-oriented. We hope that these words can be translated into decisions taken during the meeting," Zhou said.
Government officials have also recently discussed a mixed economy, one that is partially made up of free enterprise and partially under government control.
"Private enterprises are usually small, and are unwilling to enter the state-owned enterprises. For if they do, they have no right to say anything and are managed by others. Also, decisions in the main interest and even in all interests are taken by big shareholders," Gao said.
To encourage private firms to enter SOEs, the country's State-owned Assets Supervision and Administration Commission under the State Council has pushed for novel trials. For example, a large SOE may not be able to implement diversity of equity, but it could open some of its businesses for trials, the paper said.
The private-owned businesses could also collaborate in their investments in SOEs. Meanwhile, the commission said that private investment subjects and SOEs could jointly set up an equity investment fund and take part in the restructuring of state-owned enterprises, jointly invest in strategic emerging industries, or embark on overseas investment projects.
