(Yicai) April 9 -- China’s state-owned assets regulator has recently established a new department to strengthen supervision of and support for state-owned enterprises’ overseas assets and operations, as more SOEs expand their investments abroad.

The Overseas State-owned Assets Administration Bureau’s main responsibilities include guiding the international operations and overseas business development of the companies it oversees, supervising and managing foreign assets, helping firms prevent and resolve risks in overseas investment and business operations as well as handling crises that arise abroad, the State-Owned Assets Supervision and Administration Commission said on its website yesterday.

The first director of the new bureau is Zhu Kai, according to the SASAC website. Although a biography was not provided, public information shows that Zhu has worked at the SASAC for many years and was previously director of the commission’s International Cooperation Bureau. He also served as deputy director of the ICB and the Planning and Development Bureau from 2019 to 2022.

Setting up the Overseas State-owned Assets Administration Bureau is intended to close regulatory loopholes for state-owned assets abroad and better prevent the loss of state-owned resources, Wu Gangliang, a researcher at the China Enterprise Reform and Development Society, said in an interview with Yicai.

This move not only urges SOEs to strengthen compliance and improve their overseas risk management systems, but also helps optimize the layout of state-owned assets abroad, phase out inefficient or high-risk projects and improve overseas brand building, Wu said.

Previously, the supervision of state-owned assets overseas was scattered across multiple SASAC departments, causing unclear responsibilities and poor coordination, and making it difficult to respond effectively to complex risks such as sudden geopolitical conflicts or international compliance issues, Wu said.

The bureau will fill the regulatory vacuum for overseas state-owned assets and provide integrated guidance from planning and investment decisions to asset management, risk control, supervision, accountability and crisis handling, said Zhou Lisha, director of the Institute for State-Owned Enterprises at Tsinghua University.

Overseas investment risks are complex and growing, said Liu Xingguo, executive vice president of the Industry-Education Integration Research Institute at Hunan Automotive Engineering Vocational University. Given the challenges of applying domestic oversight models to foreign operations, it is necessary to create a dedicated regulatory agency.

The new bureau will provide overall guidance, risk warnings and crisis management for overseas projects, said Liu, who has long studied SOE reform. It will also explore, during the supervision process, the establishment of a specialized, cross-border asset supervision and management system that is compatible with state ownership while aligning with overseas market conditions and international rules.

The SASAC represents the central government as the shareholder in related SOEs, exercising oversight, reform guidance as well as operational management. At present, 97 large SOEs report directly to the SASAC, and their main businesses are concentrated in key fields related to national security and the economy, such as energy, defense, communications and transportation.

Editors: Tang Shihua, Kim Taylor