Economic Information Daily:

As you mentioned, the three-year reform campaign for SOEs has been completed. Could you please elaborate on the milestone achievements accomplished? Did you gain any beneficial experiences and what effective measures did you adopt in the process? What are the consideration and arrangements of the SASAC for the next round of reforms? Thank you. 

Weng Jieming:

Thank you for your questions. The three-year reform campaign for SOEs from 2020 to 2022 is a major project personally planned and deployed by General Secretary Xi Jinping, generating profound significance in the reform history of SOEs. Thanks to the joint efforts of all parties, including the strong support of friends from the media, the main goals of the three-year SOEs' reform campaign have been accomplished and three notable achievements have been made.

First, the modern enterprise system with Chinese characteristics and the state-owned assets supervision system has become more established and achieved notable results. We have firmly adhered to two principles. We have strengthened the Party's leadership in improving corporate governance and completed restructuring SOEs into corporate systems. We have fully established boards of directors in 38,000 SOEs and accelerated building a governance mechanism featuring statutory powers and responsibilities, transparency, coordinated operation, and effective checks and balances. We have adhered to and improved the regulatory system for state assets that focuses on managing capital, giving full play to the advantages of the professional, systematic and law-based supervision system. We have also enhanced centralized and unified supervision and guidance over state assets that are locally operated. The proportion of state assets under unified supervision by provincial and prefecture-level departments of the SASAC reached 98% and 99%, respectively.

Second, we have made noticeable progress in the layout optimization and restructuring of the state owned sector. Over the past three years, seven centrally administered SOEs in four groups and 347 provincial SOEs in 116 groups have carried out strategic restructuring in a market-oriented manner. We added eight new centrally administered SOEs, including China Star Network and China Rare Earth Group, with them being either newly established or newly accepted as central SOEs. We have further promoted professional integration, and state-owned capital has been further concentrated in important industries, dominant enterprises and their main businesses. We have vigorously eliminated backward production capacity and disposed of non-main and non-dominant businesses and inefficient and ineffective assets. With the disposal task fully completed, a total of 306.7 billion yuan of existing assets were put to market-oriented use and the value added reached 23.4 billion yuan. We have removed social functions from SOEs and resolved issues inherited from the past. We have also stepped up efforts to optimize the layout of strategic emerging industries. As Mr. Zhang mentioned, over the past three years, centrally administered SOEs' investment in strategic emerging sectors has grown at an average annual rate of more than 20%, with the operating revenue accounting for more than 35% of the total, realizing the replacement of the old by the new and accelerating the transformation of growth drivers.

Third, improving the vitality and efficiency of SOEs has achieved remarkable results. The three systemic reforms of SOEs, marked by "the promotion and demotion of management personnel, hiring and firing of employees, and salary increase and decrease," have made a breakthrough on a large scale at multiple levels. The proportion of centrally administered SOEs and their local subsidiaries at various levels that carry out a tenure system and contract management has increased from 23.5% and 23.2%, respectively, at the end of 2020 to more than 99% at present. By the end of 2022, 38,000 management personnel of centrally administered SOEs and their subsidiaries at all levels were either reassigned or resigned due to incompetence, accounting for approximately 6.9%. There are 5,750 subsidiaries of centrally administered SOEs that have launched medium- and long-term incentives, accounting for about 94.8% of qualified subsidiaries.

General Secretary Xi Jinping emphasized that if we want SOEs to do well, we must reform them and transform them into modern enterprises . After three years of reform, the group of old SOEs has taken on a new look and unleashed fresh vitality. A group of modern new SOEs have mushroomed, thrived and embarked on a new journey of speeding up the construction of world-class enterprises. Guided by General Secretary Xi Jinping's important instructions on the reform and development of SOEs, we are more confident and determined to further deepen SOE reform and improve SOEs.

There is no end to development, and reform should not stop. The 20th CPC National Congress made specific plan on deepening state-owned capital and SOE reform. General Secretary Xi Jinping personally planned a new round of actions to deepen and upgrade SOE reform. We will firmly implement, adhere to and strengthen Party leadership in all of our work, insist on consolidating the basic socialist economic system, continue reforms to develop the socialist market economy, focus on improving the core competitiveness of SOEs and enhance their core functions, and take advantage of the momentum to carry out the new round of actions to deepen and upgrade SOE reform, which mainly includes the following three aspects.

First, we will move faster to improve the layout and structure of the state-owned sector and enhance its function of serving the national strategy. SOEs, especially centrally administered SOEs, should play a strategic supporting role and their due role in serving the country's overall interests and building a new development pattern. We will promote strategic reorganization and professional integration in a market-oriented manner, make greater efforts to deploy forward-looking strategic emerging industries, promote the digital, intelligent, green transformation and upgrading of traditional industries, improve the resilience and security level of industrial and supply chains, and promote the new type of industrialization and modernize the industrial system.

Second, we will accelerate the improvement of modern corporate governance of SOEs with Chinese characteristics and truly operate according to a market-oriented mechanism. We will consolidate the achievements of the SOE reform over the past three years and dynamically optimize the list of the pre-research items of different types at different levels concerning major business management for the Party Committee or CPC leadership group of SOEs. We will improve the quality and performance of external directors and the modern enterprise system with Chinese characteristics. We will continue to deepen the three systemic reforms and improve the level of modern management. Therefore, we are taking relevant actions to build world-class SOEs in an all-round way.

Third, we will speed up the improvement of systems and mechanisms that are conducive to the scientific and technological innovation of SOEs and accelerate the creation of innovative SOEs. Efforts should be made to solve prominent problems such as mechanisms, investment, talents, and application that restrict corporate scientific and technological innovation, improve the incentive and restraint mechanism and the talent training system, further reinforce the principal position of enterprises in innovation, and jointly build a good innovation ecology, so as to truly fulfill the role of the national team of scientific and technological innovation.

Thank you.