21st Century Business Herald:

The Opinions of the CPC Central Committee and the State Council on Supporting High-level Reform and Opening Up of Pudong New Area and Building Pudong into a Pioneering Area for Socialist Modernization were published yesterday. It mentioned actively and prudently promoting mixed-ownership reform, merger, and reorganization of SOEs where conditions permit. How should we interpret it? What deeper explorations will be made in thepioneering area compared with current reform measures? Thank you.

Peng Huagang:

Thank you for your questions. As for the mixed-ownership reform, systematic arrangements have been made throughout the Guidelines on Deepening Reform of SOEs as well as other supplementary policies and the three-year action plan since the Third Plenary Session of the 18th CPC Central Committee. It has also been mentioned in major national strategies, including plans for the pioneering area. This is one of the important aspects of SOE reform, so it should be mentioned. The CPC Central Committee has long made its policies clear, and we have made active efforts over the past few years to implement them. In general, we still carry out reforms according to local, business, and enterprise conditions and oppose one-size-fits-all or arbitrary arrangements, no matter which sector we are handling.

First, we emphasize reform at different levels and in different fields. In terms of different levels, group companies, their subsidiaries and sub-subsidiaries should adopt different measures. Among group companies, we have made it clear to carry out more diversified reforms rather than mixed-ownership reforms. In terms of different fields, we emphasize further promoting market-oriented reforms in highly competitive industries. Enterprises owned by companies invested and operated by state-owned assets are also the focus of our mixed ownership reforms.

In a word, we will actively and prudently promote reforms through approaches tailored to the specific conditions of each enterprise. Another very important part of the process is to transform the operating mechanism. Mixed-ownership reforms help to further improve governance and develop market-based operating mechanism. For example, professional managers and market-based salary distribution are what we require on the whole. We hope that the pioneering area can step up its reform in this regard. Thank you.