State-Owned Enterprises and State-Owned Enterprise Reforms

state-owned enterprise reforms: The administration of President Xi Jinping began working on state-owned enterprise reforms in 2014, and 2015 was seen as the year in which the reforms were set to pick up speed, according to Asahi Shimbun. These reforms have been underpinned by three main pillars: the promotion of a system of mixed ownership in which part of the shares and capital of state-owned enterprises are sold off to the private sector; the reorganization of large state-owned enterprises into holding companies called state-owned capital investment companies, and the development of a state-owned capital management system whereby the efficiency of state-owned capital can be improved; and in addition to the repositioning of state-owned capital in accordance with the level of its public nature, the development of modern corporate systems for the improvement of corporate governance. However, the rapid fall in share prices has brought reform progress to a halt. The mixed ownership system is being touted as a win–win relationship that will benefit both state-owned enterprises and private-sector enterprises, and the initiative is gaining ground among central and local governments. In terms of local government initiatives, Guangdong province has set itself a high target of converting 80 percent of its state-owned enterprises into mixed ownership enterprises by 2020, raising 100 billion yuan of private-sector capital in 13 industries, including traffic and transportation, construction materials, metallurgy, minerals, electrical power, travel, finance and investment, medical and sanitation. In the case of a major oil company under central government jurisdiction, 30 percent of the shares of a subsidiary handling retail products were sold off, raising a total of 107.1 billion yuan from 25 domestic and foreign investors. (news.financializer.com). As reported in the news.