After 20 years’ reform and exploration, the management system and operational mechanism of state-owned enterprise (SOE) have undergone profound changes. Currently more than half of the state-owned and state-holding large backbone enterprises, have been transformed into enterprises of company system with multiple share holders; a large number of state-owned enterprise have listed in both domestic and international capital markets, which has promoted the mechanism transformation and the management innovation; the reform of labor, human resources and distribution systems has also been actively carried through. Especially, with the establishment and perfection of new state-owned assets management system, the marketization of state-owned enterprise operation is being further accelerated and state-owned enterprises’ vitality is gradually increasing.

Today, the complement of domestic and international markets and resources is strengthening, which provides China’s economy with a favorable external environment and creates a rare opportunity for the development of China's enterprises. In the next 15 years, China will fulfill its goal of comprehensively building a well-off society, and Chinese enterprises are shouldering the important responsibility of promoting social development. Whether these enterprises are able to seize this favorable opportunity and assume the great historical mission depends, to a large extent, on their internal mechanism vitality and the improvement of their competitiveness. We have clearly realized that the reform and development of state-owned enterprises are still faced with many deep-seated contradictions and problems, including the lagging behind construction of a modern enterprise system, the unreasonable layout and structure of state-owned enterprises, their poor core competitiveness, and their heavy social burden. With the further deepening of the reform and opening up, state-owned enterprises are facing increasingly intense competition. Therefore, we have to enhance our sense of urgency and responsibility, firmly establish a scientific concept of development, make grater determination and more efforts and further accelerate the reform and innovation of state-owned enterprises.

The first key point in state-owned enterprise reform is to accelerate the share holding system reform of large enterprises and to establish and develop a modern enterprise system. That is, to continue to promote the reform of state-owned enterprises in line with the market direction, actively introducing domestic and foreign technology, management, and strategic investors with capital strength, market and high reputation to the share holding system reform of large state-owned enterprises and developing a mixed ownership economy with the equity participation of the state capital, collective capital, and non-public capital; to continue to support the domestic and international listing of large state-owned enterprises who are able to meet the requirements after their standardized restructuring and the overall listing of main business of certain state-owned enterprises; to support and guide the share merger reform of state-owned large and medium-sized listed companies so as to improve their overall quality; to consider the promotion of the pilot board of directors of state-owned investment corporations as the key, improving the corporate governance structure, and gradually forming a effective and balanced mechanism with investors, board of directors, board of supervisors and managers responsible for their own duties and cooperating with each other.

The second key point is to promote the strategic restructuring of the state-owned economic layout and to improve the overall effect of resource allocation. We will introduce guidance for central enterprise layout and structure adjustment, to promote the focus of state-owned capital on important industries and key areas concerning the national security and national economic lifelines, on the industries with competitive advantages in state-owned economy and the areas where leading industries will be formed in the future, and on the large companies and enterprises with relatively higher international competitiveness.  Letting the market to play its basic role in the allocation of resources, we will explore a market-oriented approach, with the assets management companies as the platform, through assets reorganization, alliance, merge and acquisitions and other means, to accelerate the restructuring and reorganization of large state-owned enterprise, to optimize the distribution of state-owned economy and to accelerate the development of a group of large state-owned enterprise with independent intellectual property rights, famous brands and competition.

The third key is to improve the independent creativity of state-owned enterprises and to promote technological innovation and resource conservation. China has come to a stage where we have to develop our economy through enhancing our independent innovation and the quality of laborers. Large state-owned enterprises have to be the backbone to promote technological progress and enhance our scientific and technological innovation.

The fourth key point is to solve problems left over by history and create a favorable environment for state-owned enterprises to participate in the market competition equally. Therefore, we have to further help state-owned enterprises out of difficult situations; to solve all the problems left by history concerning large and middle-sized state-owned enterprises’ withdrawal from the market by 2008; to promote the separation of secondary business from the main one and make full use of the assets of secondary business to solve the problem of redundancy; and to gradually solve the problems of enterprise retirees and guarantee social stability at the same time, so that a stable development of enterprises is ensured.