Govt issues plan on State-owned capital management reform

The State Council issued a plan on the reform of State-owned capital management, pledging to reduce executive interference in State-owned enterprises.

According to the plan released on April 28, State-owned-enterprises (SOEs) will be granted more autonomy to run their businesses, the boundary of power and responsibilities between representatives of State capital and SOEs will be clarified, and the power of SOEs’ board of directors should be ensured.

Representatives of State capital, the plan says, will come from the State-owned Assets Supervision and Administration Commission, the Ministry of Finance, and other departments and institutions, authorized by the State Council.

A list of State capital representatives' oversight powers and responsibilities should be made, affairs outside which will be decided by enterprises.

SOEs should define articles of association, regulating different bodies of the company, according to the plan.

State capital representatives’ ideas will be embodied through directors, who are appointed according to the equity the State capital owns.

Representatives should offer different authorization to different kinds of enterprises, including State-owned capital investment or operation companies, commercial companies, and public-interest oriented companies.

Authorization will be offered to State-owned capital investment or operation companies on strategy planning, management of core business, human resources, equity incentives, wages, and management of major financial issues.

SOEs are urged to improve corporate governance and capital operation.

The plan stresses improving the oversight system on State capital by building an online oversight information platform, coordinating different oversight bodies, and improving the accountability system over irregular operation and investment.