(Yicai Global) May 26 -- China considers introducing a slew of new policies to support the development of central state-owned companies in strategic emerging industries such as environmental protection, aerospace, biotechnology, and new energy vehicles.
The policies should create a favorable environment for industrial development, the State-owned Assets Supervision and Administration Commission announced after a meeting on May 24.
Companies owned by the central government act as a backbone and strategic guide as they are resourceful and highly operational, several experts said to Yicai Global. Next, policies should rationalize mechanisms, drive innovation, and release vitality, they added.
The SASAC said that central SOEs should create an open and cooperative industrial ecology, deepen cooperation with other types of enterprises, improve industry coordination models, and create a number of world-class emerging industry clusters. Moreover, they should explore more flexible and efficient market mechanisms, management systems, and inclusive mechanisms to activate creativity and vitality.
SOEs need to solve some problems such as the mismatch between terms of office and the cycle of research and development, improve failure tolerance, and enhance the effective use of scientific research results to promote development, per Bai Chongen, dean of the School of Economics and Management at Tsinghua University.
SOEs should increase investments in emerging industries, create related funds, and allocate capital via channels such as the Shanghai bourse's Star Market, according to Song Zhiping, president of the China Enterprise Reform and Development Society. It is necessary to target certain fields that the country urgently needs while integrating private high-tech enterprises via mixed-ownership reforms to accelerate development, Song added.
Asset acquisition, equity investment, and business integration can together be used to advance the development of emerging industries, per Xiang Anbo, deputy director of an institute under the Development Research Center of the State Council. China should also strengthen policy support for state-owned investment companies to cultivate new industries, Xiang added.
Editor: Emmi Laine, Xiao Yi