(Yicai Global) April 16 -- China’s state enterprises will take an active part in a new import expo this year and will organize a buyers’ group to hold talks on cooperation at various levels with all parties, including importers and foreign businesses, the state-owned assets regulator said today.
Central government-owned firms will attend the first China International Import Expo that is scheduled for November, said Peng Huagang, spokesman for the State-Owned Assets Supervision and Administration Commission (SASAC). The CIIE will take place at the National Exhibition and Convention Center in Shanghai between November 5 and 10.
“As China opens further, cooperation between central enterprises and those under various types of ownership, including foreign-funded firms, will become closer,” Peng said at a press conference to announce the first-quarter performance of SOEs.
Participation by foreign companies in the ongoing mixed-ownership reform of central enterprises is inevitable with further market opening. China has made steady progress with mixed-ownership reform in a bid to enhance the competitiveness and improve the financial performance of its vast state sector. The idea behind diversifying the ownership structure of SOEs is to introduce private sector and overseas investment and management to bolster their “vitality, influence, and control.”
President Xi Jinping proposed initiatives to increase the ratio of foreign investment in some sectors in his keynote speech to the Boao Forum for Asia and these measures will be implemented in major state-backed companies. At the gathering last week in Hainan province, Xi promised continual effort in reform and opening up along with a commitment to an open economy.
“The proportion of state-owned enterprises in heavy industry is very high, and this is an issue for central-enterprises’ future development strategy that SASAC has always considered,” Peng said. “Along with overall structural adjustment, we also want to gradually rearrange the framework of central enterprises.”
“Central enterprises will be more open during reform, above all in reform of the property rights sector,” Peng added.
SOE First-Quarter Results
Debt at these firms fell 0.4 percent in the first quarter to continue a years-long drop, but only by 0.3 percent to 0.4 percent a year, he noted. Central enterprises ran stably in the first quarter, and their operating income rose 8.7 percent from the year prior, according to figures he shared.
Net profit attributable to their parent companies was up 24.2 percent on last year, while returns on state-owned capital rose greatly. State electricity, coal, machinery and commerce businesses saw rapid income gains, while such growth was steady for those in petroleum, petrochemicals, construction and transport.
Last week, China’s top economic planner said it will continue to encourage the participation of private and foreign investors in the reform of the country’s vast state-owned sector.
Private and foreign investors can take part through various ways including debt-to-equity swaps and investments in bonds and equities, the National Development and Reform Commission said in post released on its website yesterday. The NDRC said it and SASAC have kicked off a third round of mixed-ownership reform for state-owned enterprises.
The latest round involves both central-run and local companies and encompasses seven key sectors: electricity, oil, natural gas, railways, civil aviation, telecoms and defense. Earlier rounds have made important achievements, the NDRC’s statement said without elaborating.
Editors: Ben Armour