China ventures into SOE mixed-ownership reform

BEIJING - China will soon unveil a list of state-owned enterprises (SOEs) to pilot mixed-ownership reform, the latest move from authorities to invigorate the country's torpid SOEs.

The list may be released as early as next Tuesday with the chosen firms administered by the central government, the China Securities Journal quoted a source close to the matter as saying on Friday.

The source stressed the firms selected are only the first round group and more SOEs will be involved step by step, describing the reform process as "crossing the river by feeling for the stones."

The reform will keep improving through the pilot, the source said.

China has made mixed-ownership reform of SOEs a significant part of its economic restructuring. The State-owned Assets Supervision and Administration Commission has rolled out a series of measures to step up the process.

Chinese SOE giants like China National Petroleum Co and China Telecom have carried out their own plans to diversify corporate ownership and invited social funds to cooperate on some business.

There are thousands of SOEs in China and they form the backbone of economic growth. But their monopolies in many fields shut out smaller market entities and lead to low efficiency and poor service.

Zhang Chunxiao, an expert working for the commission, said state capital can withdraw entirely or simply hold a small stake in fully competitive sectors, making room for private enterprises to flourish, and remain the relative largest shareholders in some emerging and pillar sectors.

However, he noted companies in resources, social welfare and key sectors should be majority state held, while sectors concerning national security should be solely state-owned.

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