The State Council has decided to establish a new supervision and management system within three years to ensure that State-owned assets are made more profitable.
At an executive meeting of the State Council on Wednesday, also approved the general goals, guidelines and this year's tasks proposed by the State-owned Assets Supervision and Administration Commission (SASAC) for reform of the State-owned assets administration system.
Premier Wen Jiabao, after hearing a SASAC report at the meeting, also ordered the sharpening of the competitiveness of State-owned enterprises to secure and increase the value of State-owned assets more effectively.
The 10-month-old SASAC is the central supervisory agency for the State-owned assets. It has been undertaking a series of reforms of the State assets management system.
The meeting requires the SASAC to focus more on assessing the business achievements of SOEs and arranging alternative work for their redundant employees.
The SASAC was also is being urged to help complete the bankruptcy cases and closing down of some money-losing enterprises.
SASAC Minister Li Rongrong pledged to speed up construction of local State assets supervisory agencies this year and continue to improve the enterprise performance evaluation system.
Li said all the provincial-level State assets supervisory agencies should be established by mid-year.
Also yesterday, SASAC issued the full text of the provisional regulation on the transfer of State-owned assets and equities in domestic enterprises.
The rule, which took effect at the start of this month, asked all domestic enterprises -- except the listed firms and financial institutions -- to enter assets and equities markets to transfer State-owned assets and equities and follow designated procedures.
It was the first time China has issued a specialized regulation on the transfer of State-owned assets and equities. The action is aimed at curbing irregularities during such transactions, which would cause losses for the State and public investors, a SASAC spokesman said yesterday.
Enterprises can choose which assets and equities exchanges to use for transactions, but they should release relevant financial information about their own status and the assets to be sold properly on the exchange platform, according to the new regulation.
Such deals should also get the approval of the general meeting of the employees of the enterprises, rather than be decided by a few leaders, it said.
In the past, lack of transparency during the transaction of State-owned assets has brewed insider trading and corruption that led to heavy losses for the State and also hurt the interest of enterprise employees and minority investors, the SASAC spokesman said.
Documents on the trading of previously untradable State-owned shares, which make up two-thirds of China's stock market capitalization, will be released at a proper time, Li said.
"We will wait for a while, until the shareholders calm down, for this will avoid unnecessary fluctuations of the stock market and be conducive to the benefits of all parties concerned," Li said.
But the authorities still have more to do to upgrade the overall State assets management scheme by introducing more market-driven rules and practices, said Hu Ruyin, director of the research center of the Shanghai Stock Exchange.
It needs a specific liability system on both the regulators and entrepreneurs to ensure the efficiency of the reforms and implementation of the rules, he said.
Apart from the two stock exchanges, where shares of the listed companies are traded, China has around 170 assets and equities exchanges for the trade of non-listed companies. Many of these equities exchanges are expected to merge in the next few years and only a few big ones will survive, experts say.
(China Daily February 6, 2004)
