Stated-owned assets abroad will receive more attention from now on as their top regulator is enhancing metrics to govern and supervise them.

Xiao Yaqing, head of the State-owned Assets Supervision and Administration Commission, or SASAC, said deepening reforms necessitate greater supervision and management of State-owned enterprises or SOEs.

“After introducing the Measures of the Supervision and Administration of Overseas Investments by SOEs, the commission will further improve the system and enhance the supervision to prevent erosion of value of State-owned assets.”

He said the future of reform is not simply to enlarge SOEs’ size but to connect China with global markets.

China’s outbound direct investment or ODI in nonfinancial sectors dropped almost 42 percent year-on-year to $78.03 billion between January and September, data from the Ministry of Commerce show.

The sharp drop does not mean the Chinese government is tightening ODI. Rather, it is encouraging qualified ones to participate in both international economic collaborations and the global corporate race, said Hu Yijian, a professor at the Shanghai University of Finance and Economics.

“I don’t see the Chinese government stopping ODI or entry of foreign capital (into China),” said Hu. “We need overseas investment to better allocate resources to markets (worldwide), but the investment structure needs to be optimized.”

Li Jin, chief researcher at the China Enterprise Research Institute, said the go-global strategy is a vital part of SOE reform. It would entail cooperation to raise production capacity and prevent monopolies in international markets. Thus, it is important to strengthen SOEs that can compete at international level, he said.

“Apart from a few private-sector companies, only SOEs can withstand fierce competition from Western behemoths. This is particularly true for sectors such as expressways, smart power grids and nuclear power where China has considerable advantages.”

A number of SOEs have been taking initiatives in line with the national call for SOE reform and the go-global strategy.

Shanghai-based China COS-CO Shipping Co Ltd, a subsidiary of China COSCO Shipping Co, is one of them.

Since it was formed in 2016 as a result of reform and restructuring of two SOEs－China Ocean Shipping Co and China Shipping (Group) Co-COSCO Shipping has invested in 48 docks.

Eighteen of them are based overseas, in countries like Singapore, Belgium, Germany, Greece and Spain.

Last August, the company acquired a 51 percent stake in Greece’s largest port Piraeus Port.

Zhang Dayu, its deputy general manager, said COSCO Shipping Ports, a subsidiary of COSCO Shipping, is working on a strategy to expand in the economies involved in the Belt and Road Initiative.

In September, the subsidiary has seen an 18 percent rise in its overall volumes from 6.5 million twenty-foot equivalent units to 7.7 million TEU, on the back of its overseas investments.

Shanghai Electric Group Co Ltd, the power company with over a 100 years’ history, is also seeking to expand into overseas markets.

The group has invested over $1.2 billion overseas, including in Germany, the United States, Italy, Japan, India and Southeast Asia.

Last year, the group earned a profit of about 13.9 billion yuan ($2.1 billion) from its overseas investments, projects and import-export business, accounting for 14 percent of the group’s total profit, suggesting it is in good health.