CMG:
In the report to the 20th CPC National Congress, it is stated that to build a modern socialist country in all respects, we must, first and foremost, pursue high-quality development. Last year, what work did the SASAC carry out to promote the high-quality development of enterprises? What progress was achieved? Are there any new plans for this year? Thank you.
Yuan Ye:
Thank you for your questions. As you mentioned, to build a modern socialist country in all respects, we must, first and foremost, pursue high-quality development, and it is also a distinct feature of the development of central SOEs on the new journey of the new era. Last year, under the guidance of the SASAC, central SOEs focused on the main task of pursuing high-quality development. They emphasized the unity of benefits and efficiency, highlighting their ability to create value. Our aim extended beyond expansion; we also encouraged central SEOs to become stronger and more competitive, and shoulder greater responsibility in effectively upgrading and appropriately expanding China's economic output.
Focusing on this goal, we have fully implemented the guiding principles of the 20th CPC National Congress and further improved our assessment and management system. Centering on high-quality development, promoting enterprises to enhance their core competitiveness and advancing central SOEs into world-class companies, we established the system of management by objectives characterized by "one profit, five ratios". The term "one profit" refers to emphasizing the assessment of profit indicators, fully reflecting the ability of enterprises to create value for society. The "five ratios" include return on equity, overall labor productivity, ratio of spending on R&D to GDP, operating cash flow ratio, and debt-to-asset ratio. Last year's objectives clearly stated that it was essential to ensure steady profit growth. As I mentioned earlier, the goal of achieving steady profit growth was accomplished in 2023. The objectives also included overall stability of the debt-to-asset ratio, and further improvement of return on equity, ratio of spending on R&D to GDP, overall labor productivity, and operating cash flow ratio.
In terms of specific work measures, in accordance with such a target management system, a special action to improve quality and efficiency was launched at the beginning of last year. This move aims to promote China's SOEs to achieve business objectives in line with requirements for high-quality development. We have also set up a quarterly round table meeting system for central SOEs. These meetings focus on the production and market operations of relevant enterprises. Simultaneously, we assist central SOEs in resolving production and operational issues, aiding them in accelerating the transformation of the development model for higher quality and greater efficiency.
Judging from the results, it is evident that central SOEs, with a bigger picture in mind, have taken proactive measures and strengthened confidence to overcome various difficulties. They have delivered solid and substantial results.
On the one hand, there has been a steady increase in quantity. Despite challenges such as insufficient domestic and international demand and a decline in prices of bulk commodities last year, central SOEs maintained overall operational stability and achieved steady growth in profitability. As highlighted in the opening statement, last year, central SOEs recorded impressive income and profit results. By the end of the year, the total assets of central SOEs reached 86.6 trillion yuan, a year-on-year increase of 6.4%.
On the other hand, there has been a significant improvement in quality. Last year, central SOEs' average return on net assets reached 6.6%, maintaining a good level of shareholder returns. Overall labor productivity per capita reached 784,000 yuan, and the operating cash ratio was 10.1%, showing a steady monthly increase throughout the year. The average asset-liability ratio of central SOEs stood at 64.8% at the end of last year, effectively controlled at around 65%, achieving overall stability. Last year, we also strengthened the governance of loss-making enterprises and the disposal of inventory and accounts receivable. This has also achieved positive effects, playing a crucial role in improving enterprises' performance, as well as enhancing their asset quality.
As we look at the indicators, what is even more gratifying is that the driving forces for enterprise development have been strengthened significantly. For example, the driving role of innovation is accelerating. Last year, central SOEs substantially increased their total research and development spending. As mentioned in the opening statement, we have invested more than 1 trillion yuan for two consecutive years. The driving role of investment is also constantly increasing. With a focus on promoting high-quality and stable development, serving the country's major strategies, and building a modern industrial system, central SOEs completed total investments exceeding 6 trillion yuan last year. The total amount of fixed-asset investment exceeded 5 trillion yuan, with investment in primary businesses accounting for over 95%. Investment in strategic emerging industries increased more than 30% year on year, accelerating the cultivation of new growth drivers.
Overall, central SOEs have worked together diligently and pragmatically, achieving progress while maintaining stability and promoting high quality through progress. With high-quality and stable growth, central SOEs have positively contributed to the steady recovery and improvement of China's economy.
Just now, I also mentioned some of the measures to be taken this year to implement the guiding principles of the Central Economic Work Conference. We will continue to adhere to the target management system of "one profit and five ratios" (total profit, as well as return on net assets, operating cash ratio, asset-liability ratio, R&D investment intensity, and labor productivity), and make efforts to ensure steady profit growth and continuous optimization of the five ratios. Next, we will continue working to steadily improve the performance of central SOEs and achieve improvements in return on net assets, labor productivity, and operating cash ratio. We will continuously enhance the intensity of research and development investment and science and technology input-output efficiency, and maintain a stable overall asset-liability ratio. We will promote high-quality development of central SOEs with tangible actions and results, amid our efforts to better fulfill our economic, political, and social responsibilities and effectively serve Chinese modernization.
Thank you.
