China's newly founded state-owned assets commission will supervise and manage assets worth 6.9 trillion yuan (US$833.6 billion), the commission's director, Li Rongrong, told a press conference yesterday in Beijing.
On behalf of the central government, the state-owned Asset Supervision and Administration Commission, or SASAC, will supervise 196 companies that own a total of 6.9 trillion yuan in assets and represents 2.5 trillion yuan of owner's equity right.
But financial assets, including those in China's top four banks, won't fall under SASAC's control, the commission said.
The commission shoulders responsibilities from several government bodies, including the former State Economic and Trade Commission and the Ministry of Finance.
"Previously, too many ministries said they were responsible for state-owned enterprises but no one took responsibility" when things went wrong, said Huang Yiping, a Hong Kong-based economist for Citigroup Inc. SASAC "will ensure there's more supervision on the behavior of managers."
The commission appoints, removes and evaluates executives of state-owned companies.
"The founding of the SASAC separated the owner and managers of state-owned properties," Li said. The com-mission, as investor responsible for assessing managers' performance, would penalize or even dismiss managers responsible for losses from state-owned enterprises.
In the past, losses and low profits from state-owned properties were mainly due to the non-separation of fund providers and management, and policy-makers failing to shoulder their responsibilities, Li said.
Among the nine areas of its missions, Li listed "develop and perfect" relevant laws and regulations as the first.
The country will soon put into force a tentative Statute on the Supervision and Administration of State-owned Assets of Enterprises, Li said.
The commission also plans to close down all state-owned enterprises that are considered bankrupt according to government criteria over the next five years.
The strengthening of the central government's supervision of state-owned companies and assets may prompt some local governments to accelerate the sale of properties to private investors lest they fall under the new ministry's control, analysts said.
"We are aware of this problem," Li said. "We will hold local ministry offices responsible for loss of state property" under their supervision.
China wants to create about 50 large state-owned companies that are competitive globally, Li said.
(eastday.com May 23, 2003)
