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China rolls out new measures to boost reform and development of SOEs, private businesses

Zhang Yue
Updated: Sep 17,2020 23:10

China will take solid steps to implement the three-year action plan for SOE reform, and make more efforts to create a level playing field for private firms, the State Council’s executive meeting chaired by Premier Li Keqiang decided on Sept 17.

The Chinese government attaches great importance to the reform and development of both State-owned enterprises (SOEs) and private businesses. General Secretary Xi Jinping underlined the need to keep advancing reform of the socialist market economy, and strengthen SOEs’ competitiveness, innovation capacity, and ability to defuse risks. He also highlighted the imperative to create a more enabling environment for private firms to grow, and help them tackle difficulties. Premier Li Keqiang stressed that SOEs should focus on their main responsibility and business, develop sound market-oriented operation mechanisms, and increase core competitiveness. At the same time, a level playing field for the private sector should be created to boost their confidence in development.

SOEs need to make continued efforts to achieve higher quality and efficiency, sharpen core competitiveness and strengthen dynamism for sustained growth, to improve their role in underpinning the national economy, those at the meeting urged.

“We will continue to unswervingly consolidate and develop the public sector, and unswervingly encourage, support and guide the non-public sector. The SOE reform needs to achieve higher quality and efficiency, help facilitate deeper cooperation between the industrial and supply chains and enhance SOEs’ core competitiveness,” Premier Li said.

Solid steps will be taken in implementing the three-year action plan for SOE reform. The task of relieving SOEs of their obligation in undertaking social programs will be essentially completed this year. Greater efforts will be made in deepening the mixed-ownership reform, strengthening the modern corporate structure, and developing sound market-oriented operating mechanisms.

SOEs will be supported in enhancing basic research and innovation, advancing research on critical technologies, and vigorously promoting entrepreneurship and innovation.

SOEs’ non-essential business will be spun off at a faster pace, to enable them to better focus on growing their main business.

The meeting also decided on further efforts to create a level playing field for private firms, to boost employment.

Market access will continue to be broadened. Power grid operators will accelerate spinning off such competitive operations as equipment manufacturing. Oil and gas infrastructure will be made equally accessible to all businesses regardless of types of ownership.

Private companies will be supported in participating in the construction of major railway projects.

“We must stabilize the growth of the private sector with every possible means. The private sector has contributed over 90 percent of new jobs. It is remarkable for a country with 1.4 billion people to achieve fairly full employment,” Premier Li said.

Key national research infrastructure will be made more accessible to the private sector. The accreditation of national-level technology centers in private companies will be accelerated. Channels for private business employees to get professional qualifications will be unclogged.

Small and medium-sized private firms will be allowed to jointly participate in industrial land transactions, including tendering, auction and listing for sale.

Local governments will be encouraged to establish risk sharing mechanisms for loans made to micro, small and medium-sized companies.

“We need to increase support for private firms and create broader space for the private sector, so that they will be able to bring into full play their respective strengths,” Premier Li said. “A prosperous private sector will in turn support the growth of the SOEs.”

The meeting also decided on measures that will help provide inter-provincial access to high-demand government services key to the growth of businesses and people’s daily lives.

Some 58 service items, including market entity registration, pension plan portability, verification of professional certificates and notarization of diplomas and driver licenses, will be accessible inter-provincially by the end of this year.

Another 74 service items, including industrial production licensing, record-filing of the settlement of medical bills, social security card application and household registration relocation, will be made available across provinces by the end of next year.

Online access will be optimized to make inter-provincial services more convenient and user-friendly. Meanwhile, the need for a smaller number of people for on-site access to these government services will also be fully met.