Central state-owned enterprises (SOEs) in China have been
advised to focus on their main areas of business and streamline
their fields of investment.
The State-owned Assets Supervision and Administration Commission
(SASAC), which supervises these 166 enterprises on behalf of the
central government,?published on its website today?a
directive? to regulate their investment activities including
those in fixed-assets and equity acquisition within the mainland.
Investments in overseas markets and those in the financial industry
are excluded.
It said central enterprises should ensure their investments
comply with the development plan of the state and economic
restructuring. They're being advised to focus on their core
businesses while investment in other areas should first receive
permission from the SASAC.
The business scale of some of the enterprises was considered to
be too wide which could lead to a waste of resources and created
investment risks and negligence in management.
"State capital should concentrate on key sectors that concern
national security and the economy," an SASAC spokesman said
yesterday.
The SASAC was offering guidance to help enhance the core
competitiveness of these SOEs, prevent risks in investment and
ensure the maintenance and appreciation of state assets, he
said.
Such guidance would also encourage the enterprises to upgrade
their business structures and development strategies while curbing
blind and irregular investments in sectors where they were not so
competitive, the spokesman added.
The SASAC insisted it respected the ability of enterprises to
make investment decisions but they had to shoulder relevant
liabilities themselves. It also guaranteed the transparency and
fairness of the supervision of the enterprises' investment
activities, the spokesman explained.
The 166 central SOEs, regarded as flagship industries, currently
hold 10.6 trillion yuan (US$1.3 trillion) of assets most of which
is invested in the key economic sectors.
They made a total of 1 trillion yuan (US$125 billion) of
investments in 2004 of which 95 percent were stakes in core
businesses, SASAC statistics reveal.
From this year they're being asked to report their investment
plans to the SASAC annually, including investment scales, funding
resources and a general introduction to their projects.
(China Daily July 7, 2006)