ThePaper.cn: 

Since the beginning of this year, two groups of four central SOEs have completed merger and reorganization. Since the 18th National Congress of the CPC in 2012, a total of 20 groups of 38 enterprises have been reorganized. I would like to ask, regarding these mergers and reorganizations, what are the considerations of the SASAC? What measures will you take next to optimize the layout and structure of central SOEs?

Peng Huagang:

Thank you for your questions. Accelerating the merger and reorganization of central SOEs is a key step to optimize the distribution, structural adjustment and efficiency of resource allocation of the state-owned sector at an accelerated pace. It is of great significance to keep the industry and supply chains stable as well as to foster world-class enterprises with global competitiveness at an accelerated pace. It is an issue of common concern. 

In the first half of this year, in line with the decisions and arrangements of the CPC Central Committee and the State Council, the SASAC worked with other relevant departments to promote the merger and reorganization of central SOEs in a steady manner, and made good progress. These included the merger and reorganization of ChemChina and Sinochem. Besides, we have carried out merger and reorganization to form specialized enterprises. For example, we established China Satellite Network Group Co. Ltd as the first central SOE headquartered in Xiongan New Area. Sinochem Holdings has been established and the integration of Sinochem and ChemChina's agricultural business has been completed. Further efforts will be made to deepen their business integration. Resources coordination in chemical engineering and other fields is also proceeding in an orderly manner. Besides, we have completed the integration of Potevio into China Electronics Technology Group Corporation. We are now connecting the two enterprises in various aspects including strategic planning, corporate governance, management system, business layout, and Party building to lay a solid foundation for deeper integration. Moreover, PipeChina is further integrating oil and natural gas pipelines and the shareholding rights of KunLun Energy's pipelines has been transferred, marking the end of the integration of major pipelines to basically form a national network. We have made great efforts in this regard in the first half of this year.

Next, the SASAC will firmly follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and implement the instructions on optimizing the distribution and structural adjustment of the state-owned sector. We will uphold market rules and guide central SOEs to carry out merger and reorganization proactively and prudently in accordance with laws and regulations. We will focus on efforts in the following aspects:

First, regarding strategic reorganization, we will focus on the supply-side structural reform, innovation-driven development and efforts to build China into a manufacturer of quality. In light of the needs of industrial development, we will steadily promote merger and reorganization in such industries as steel, and power transmission and distribution equipment manufacturing for central SOEs with ripe conditions. We will actively foster and establish new central SOEs in related fields at proper times. Several years ago, reorganization usually occurred among two or three enterprises. In recent years, specialized reorganization usually gives birth to new central SOEs. 

Second, in terms of specialized integration, with the goal of building strong and specialized enterprises, we will vigorously promote specialized integration through free transfer of shares, purchase of shares, joint-shareholding and other means and enterprises with competitive edges will be the major players in the process. By optimizing resources allocation, we hope to sharpen enterprises' core competitiveness and build world-class enterprises with global competitiveness.

Third, to advance integration, we will urge newly-established central SOEs and those involved in new merger and reorganization operations to further integrate internal resources, bring out the benefits of synergy, and improve the efficiency of resources allocation to achieve the goals of the reform as soon as possible. Thank you.