According to the latest data provided by State-owned Assets Supervision and Administration Commission of the State Council (SASAC), in the first half of this year, 423 state-owned key enterprises have realized accumulated profits of 555.85 billion RMB. Meanwhile, the assets scale of state-owned key enterprises increased steadily. By the end of June, it has been up to 16,414,250 million RMB. Li Rongrong, the director of SASAC, said that since the 16th National Congress of Communist Party of China our country continued to adjust the layout and structure of state-owned economy in order to accelerate the pace of reform of state-owned enterprises and enhance the vigor and competitiveness of state-owned enterprises further.

Continuing to adjust the layout and structure of state-owned economy is an important task to deepen economic system reform proposed by the 16th National Congress of Communist Party of China. In order to implement the spirit of the 16th National Congress of Communist Party of China and the 2nd plenary session of the 16th Central Committee of CCP, in 2003, the State Council established the State-owned Assets Supervision and Administration Commission.

It is revealed by Li Rongrong that during these four years aiming to problems such as over broad distribution of central enterprises and industries, over abundant major businesses of some enterprises, unclear direction of major business, unreasonable resources allocation and low assets operation efficiency SASAC took authorizing major business and promoting combined reorganization as the main line to advance the layout and structure adjustment of state-owned economy of central enterprises. Based on careful investigation and research, the major business of 153 central enterprises were authorized and published successively in 7 batches, which actively promoted the combined reorganization of central enterprises, separation of major and auxiliary businesses, the system reform of auxiliary business and separation and implementation of social functions and advance state-owned assets to centralize towards the important industries and key fields related to national security and national economic lifeline.

“So far, 77 central enterprises have been participated in 41 reorganizations. And the number of central enterprises reduced from 196 to 157,” Said Li Rongrong. He introduced that the administrative levels in most central enterprises will be compressed within three levels primarily by refining major businesses, separating auxiliary businesses, compressing administrative levels and shortening administrative chain, which will realize structural optimization of enterprise organization and effective allocation of inner resources and enhance the core competitiveness of enterprises. Meanwhile, local governments established layout and structural adjustment plan of state-owned economy during “11th five-year plan” considering practical situations and defined the direction of adjustment and the fields of state-owned capitals centralization. Forward & backward adjustment will be carried out to state-owned enterprises by multiple modes such as system reform, reorganization and strategic investor introduction in order to develop a batch of advanced enterprises which have influence and impetus on local economy.

“Forward with achievement, backward with order”, implementing policy-related shut down or bankrupt to state-owned enterprises and making a batch of bad enterprises with deficit in long time, insolvency and no hope of making up deficit depositing under centrally planned economy system for many years is an important strategic decision of the Central Party Committee and the State Council for accelerating the layout and structural adjustment of state-owned economy. By the end of 2006, 4251 enterprises had been policy-related shut down or bankrupted in the nationwide and 8.37 million persons had been allocated, which finished 80% of the workload. Among them, the work of policy-related shut down or bankrupt in three key industries such as coal, nonferrous metal and war industry has entered the ending stage. 

With the efforts of more than four years, the layout and structural adjustment of state-owned economy has obtained obvious effects. Although the number of state-owned enterprises reduces, the whole quality and competitiveness of state-owned economy are increased continuously, and the control, influence and impetus of state-owned economy are enhanced greatly. By the end of 2006, the total number of state-owned enterprises was 119,000 in the nationwide, which reduced by 31,000 compared with that of 2003 with average annual decreasing rate of 8%. Thus, the average assets per enterprise was 240 million RMB, which increased by 84.6% compared with that of 2003 with average annual increasing rate of 22.7%.

The vigor of state-owned enterprises was enhanced further. At present, more than 80% of the state-owned assets in central enterprises centralize in the fields of war industry, energy resources, transportation, important equipment manufacturing and important mining resources exploitation, undertake almost all the productions of crude oil, natural gas and ethylene in the nationwide and provide the entire basic telecommunication service and most value-added services. The generated energy accounts for 55% of the whole country, the total turnover volume of civil aviation transportation for 82%, turnover volume of shipping transportation for 89%, the output of automobiles for 48%, the steel with high added-value for 60%, hydroelectric equipment for 70% and thermal electric equipment for 75%.

Meanwhile, it is obvious for state-owned assets to centralize towards industries such as energy, raw materials, transportation, war industry, important equipment manufacturing and metallurgy. In 2006, the state-owned assets of basic industries was 3,300 billion RMB accounting for 70.6% of the total state-owned assets occupied by all the state-owned enterprises, which increased by 5.1% compared with that of 2003. The control of state-owned assets is enhanced continuously. The social capitals controlled directly by state-owned assets were 1,200 billion RMB, which increased by 1.1 times compared with that of 2003.