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Speakers:

Mr. Yuan Ye, vice chairman of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC)

Mr. Zhuang Shuxin, secretary general of the SASAC

Mr. Li Bing, deputy secretary general of the SASAC and director of its Bureau of Financial Oversight and Operational Evaluation

Mr. Xie Xiaobing, a person in charge of the Bureau of Property Right Management of the SASAC

Chairperson:

Mr. Xie Yingjun, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

Jan. 24, 2024

Xie Yingjun:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we have invited Mr. Yuan Ye, vice chairman of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), to brief you on enhancing core functions, improving core competence and better realizing the high-quality development of centrally administered state-owned enterprises (SOEs), and take your questions. We are also joined by Mr. Zhuang Shuxin, secretary general of the SASAC; Mr. Li Bing, deputy secretary general of the SASAC and director of its Bureau of Financial Oversight and Operational Evaluation; and Mr. Xie Xiaobing, head of the Bureau of Property Right Management of the SASAC.

Now, let's give the floor to Mr. Yuan Ye for a brief introduction.

Yuan Ye:

Thank you. Ladies and gentlemen, good morning. I am delighted to meet with friends from the media and brief you on state assets and SOEs.

The year 2023 that has just passed was the first year of fully implementing the guiding principles of the 20th National Congress of the Communist Party of China (CPC), and a year of economic recovery and development after three years of COVID-19 prevention and control. It was also a crucial year for state-owned assets and SOEs to remember their mission and responsibilities and restart on a new journey with continued efforts. General Secretary Xi Jinping issued important instructions on the work of state-owned assets and SOEs. He presided over several important meetings to review significant documents regarding state-owned assets and SOEs, inspected multiple SOEs, and delivered important speeches. At the recently held Central Economic Work Conference, he made significant arrangements for the reform and development of SOEs. This has provided clear guidance on the direction and fundamental principles for us to solidly carry out the work related to state-owned assets and SOEs, promote the high-quality development of SOEs, and better fulfill their functions, missions and responsibilities.

Over the past year, we have thoroughly implemented the guiding principles of General Secretary Xi Jinping's important speeches and instructions, earnestly carried out major arrangements made by the CPC Central Committee and the State Council, focusing on enhancing core functions and improving core competence. We have adhered to the comprehensive leadership of the Party over SOEs, deepened the reform of state-owned assets and SOEs, enhanced the ability to create value, intensified efforts in technological innovation, accelerated the development of strategic emerging industries, and promoted SOEs to better fulfill their economic, political and social responsibilities. Remarkable achievements have been made in various aspects, making significant contributions to starting the new journey on a positive note. In 2023, central SOEs achieved operating income of 39.8 trillion yuan, with a total profit of 2.6 trillion yuan and a net profit attributable to the parent company of 1.1 trillion yuan, realizing steady and high-quality growth. The cumulative completion of fixed asset investment (including real estate) was 5.09 trillion yuan, a year-on-year increase of 11.4%, among which, strategic emerging industries completed investment of 2.18 trillion yuan, a year-on-year increase of 32.1%; and research and development funding reached 1.1 trillion yuan, surpassing the 1-trillion mark for two consecutive years.

This year marks the 75th anniversary of the founding of the People's Republic of China and is a crucial year for achieving the goals and tasks of the 14th Five-Year Plan. State-owned assets and SOEs will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, comprehensively implement the guiding principles of the 20th CPC National Congress and the second plenary session of the 20th CPC Central Committee, thoroughly implement the arrangements of the Central Economic Work Conference, adhere to the general principle of seeking progress while maintaining stability, and firmly grasp the necessity of adhering to high-quality development in this new era. We will deeply implement actions to enhance the reform of SOEs, focus on improving the innovation and value creation capabilities of central SOEs, further optimize and restructure the state-owned economy, accelerate the construction of a modern industrial system, and better leverage the roles of technological innovation, industrial control and safety support. This is aimed at continuously driving the economy to achieve efficient improvements in quality as well as reasonable growth in quantity and make new contributions to China's endeavor to build itself into a stronger country and rejuvenate the Chinese nation on all fronts by pursuing Chinese modernization.

Next, my colleagues and I are willing to answer your questions. Thank you.

Xie Yingjun:

Thank you, Mr. Yuan. The floor is now open for questions. Please identify the media outlet you represent before asking your questions.

China News Service:

The Central Economic Work Conference stated that we should seek progress while maintaining stability, promote stability through progress, and establish the new before abolishing the old. What work will the SASAC and central SOEs take as priorities to better contribute to consolidating and strengthening the momentum of economic recovery? Thank you.

Yuan Ye:

Thank you for your question. I’ll answer this. As you mentioned, the Central Economic Work Conference issued plans and arrangements for the work this year. The SASAC has conscientiously implemented the plans of the conference. We made detailed and overall arrangements for implementation at a meeting of heads of central SOEs held not long ago. At the meeting, we proposed that in the next stage of development, central SOEs should pay more attention to high-quality development and focus on improving value creation capacity during the process. In terms of value creation capacity, we encourage central SOEs to enhance value in five aspects. First is value-added; second is functional value; third is economic value added; fourth is the proportion of income and value added of emerging strategic industries; and fifth is brand value. The purpose is to guide enterprises to resolutely implement the guiding principles of the Central Economic Work Conference; to seek progress while maintaining stability, promote stability through progress and establish the new before abolishing the old; to continue to strengthen core functions and improve core competitiveness; to grow bigger, better, and stronger in the process of serving national strategies; and to better achieve unity between economic, political and social benefits. 

To be specific, by encouraging central SOEs to enhance value added, we guide them to promote the development of the state-owned sector and strive to achieve satisfactory returns for shareholders, profits for companies, income for employees and tax revenues for the country, thereby making a greater contribution to national economic growth. By emphasizing improvement in functional value, we guide central SOEs to play a proactive role in serving national strategies, safeguarding national security, and safeguarding and improving people’s well-being, and to help bring into full play the strategic support of the state-owned sector. By calling for greater economic value added, we guide central SOEs to optimize investment direction and layout, curb the impulse for blind investment, reduce inefficient and ineffective capital investment, and generate more profitable income and profit with operating cash flow. By emphasizing increased proportion of income and value added of emerging strategic industries, we encourage central SOEs to accelerate the shift to innovation-driven growth, and to play a leading role in developing new productive forces and making new growth drivers stronger at a faster pace. By highlighting brand value, we encourage central SOEs to enhance capacity-building and image-building, improve the added value and leading role of brands, and accelerate the building of world-class enterprises. 

Specifically, we will give priority this year to work in five aspects.

First, we will focus on improving quality and performance and make every effort to advance the continued recovery of China’s economy. At the beginning of this year, the SASAC launched a special action to enhance quality and performance and ensure stable growth and give play to the key role of effective investment. At the same time, efforts are being made to improve the quality of listed companies controlled by central SOEs and to enhance returns for investors. We will strengthen lean management and make more contributions to economic and social development by comprehensively improving the quality and efficiency of central SOE operations.

Second, we will focus on advancing industrial innovation through scientific and technological innovation, and develop new productive forces and advance new-type industrialization at a faster pace. We encourage enterprises to further reinforce their principal role in scientific and technological innovation and make greater efforts to gather innovative resources, strengthen organization of innovation and build a better innovation ecosystem, and speed up efforts to secure breakthroughs in core technologies in key fields. We will keep working on both emerging strategic industries and traditional industries, actively develop new industries and new arenas, and accelerate efforts to consolidate the foundation of and transform traditional industries, and make industrial and supply chains more resilient and secure, so as to provide more support for modernizing the industrial system.

Third, we will focus on deepening the reform of state-owned capital and SOEs and accelerate the building of new modern SOEs. We will carry out the action to deepen the reform of SOEs, establish a sound modern corporate system with distinctive Chinese features and a market-oriented operating mechanism, further improve supervision methods, and raise service efficiency, so as to add vitality and boost momentum for the high-quality development of enterprises.

Fourth, we will focus on enhancing the capacity for providing strategic support and meeting basic needs and better serve China's overall economic and social development. We will resolutely implement the coordinated regional development strategy and major regional strategies, optimize the distribution of major productive forces, and provide livelihood service and fundamental guarantees. At the same time, we will step up efforts to ensure the market supply and stable prices of food and strategic energy resources so as to serve the building of the new development paradigm.

Fifth, we will focus on strengthening Party leadership and Party building, and guide and safeguard the high-quality development of enterprises through high-quality Party building. In doing this, we will uphold General Secretary Xi Jinping's important thought on Party building as the overarching principle, take the rectification of problems identified in inspections as an opportunity, focus on ensuring the fulfillment of political responsibility for governance over the Party, and give priority to improving the systems for exercising full and rigorous Party self-governance. We will lay more emphasis on addressing inadequacies and shoring up weak points, on promoting standardization and institutionalization, and on giving better play to the role of Party building in enterprises. We will strive to combine strengthening Party leadership with improving corporate governance, and advance in-depth integration between Party building and corporate production and operation, to provide fundamental guarantees for high-quality development of enterprises and effectively translate the political strengths of Party building into innovation, development and competitive strengths of enterprises.

In general, we will keep to our mission in advancing the cause of the Party and the country, and resolutely play a strategic role in serving the building of a great modern socialist country in all respects, a leading role in driving the upgrading of the industrial system, and a supporting role in promoting China’s economic and social development. Thank you.

Nanfang Daily, Nanfang Plus:

Last year, General Secretary Xi Jinping stressed during an inspection tour in northeastern China's Heilongjiang province that resources for sci-tech innovation should be integrated to guide the development of strategic emerging industries and future industries so as to form new productive forces at a faster pace. My question is, what progress was made in 2023 by central SOEs in developing strategic emerging industries and future industries? What major steps will be taken? Thank you.

Yuan Ye:

The question you raised is very important. As I just said, central SOEs will take developing new productive forces as a major task. Now, let's invite Mr. Zhuang to elaborate on this matter.

Zhuang Shuxin:

Thank you for your questions. At present, a new round of scientific and technological revolution and industrial transformation is reshaping the global economic structure and industrial landscape, giving birth to an increasing number of new industries and new business forms and models. Strategic emerging industries and future industries, especially, have become new arenas for businesses from different countries to compete, as well as the primary platform for developing new productive forces.

Since last year, the SASAC and all central SOEs have carefully studied and implemented the principles from General Secretary Xi Jinping's important instructions on accelerating the growth of new productive forces and propelling the advancement of new industrialization. We have regarded developing strategic emerging industries and future industries as a task that possesses big-picture importance and will serve as locomotives. We have made positive progress in this regard.

First, we have identified new directions for development. Two campaigns were launched for central SOEs to boost strategic emerging industries, such as next-generation mobile communications, artificial intelligence (AI), biotechnology, and new materials, and to foster future industries, such as future information. By doing so, we have identified the priority and direction of development and laid out detailed targets and pathways.

Second, we have effectively ignited new growth engines for enterprises. A full range of policies were made in resource investment, core business fostering, and personnel training, providing enterprises with maximum and effective support. The management of their primary responsibilities and core business was optimized, and a dynamic mechanism for adjusting their core business was established and improved. We encouraged enterprises to speed up their transformation and upgrading and look for new growth drivers. We also fostered emerging industries that are of long-term and strategic importance. Enterprises acted quickly to improve their systems and mechanisms to adapt to new industries and new arenas and implement supporting policies. Enterprises have been encouraged to pursue innovation and exploration and take a trial-and-error approach, thus invigorating businesses and increasing efficiency. 

Third, we have made breakthroughs in the layout of industries. Last year, the investment from central SOEs in strategic emerging industries totaled 2.18 trillion yuan, marking an increase of 32.1% year on year. Numerous pivotal projects were initiated in sectors like photovoltaic-based hydrogen production, carbon fiber manufacturing, and automotive chips. New businesses were established across a number of industries, such as laser manufacturing, quantum communications, and satellite internet. We also pursued restructuring and integration efforts in sectors including electronic technology, new energy, environmental conservation, and intelligent connected vehicles. New industries and new business forms are becoming major growth areas of enterprises.

Next, we will improve work mechanisms and optimize supporting policies. Mobilizing the resources of the whole system, we will work ceaselessly and make every effort to develop strategic emerging industries and future industries. Focusing on the two campaigns launched by central SOEs in this regard, we will move faster to achieve pivotal progress in increasing the revenue of strategic emerging industries, as well as the contribution of their value-added to GDP, thus achieving strategy transition in the layout and structure of central SOEs. To be specific, we plan to initiate a number of major projects, select 100 representative projects of strategic emerging industries, foster clusters of strategic emerging industries, launch special actions such as AI+, and act quickly to make landmark advances in key areas such as biotechnology, new materials, and new energy vehicles (NEVs). We will also move faster to make technological breakthroughs in industrial development and cultivate start-up enterprises, leading enterprises, and unicorn enterprises so as to deliver signature products in sectors such as brain-like intelligence, quantum information, deep earth and sea exploration, and laser manufacturing. We will establish a new systematic business environment, create innovative cooperation models among central SOEs, local enterprises, and enterprises of all sizes and forms of ownership, and strengthen coordination across different businesses and sectors so as to jointly build a business environment featuring efficient coordination and sound growth. The funds given to strategic emerging industries will deliver results at a faster pace. We will make solid efforts to promote industrial innovation with technological innovation and ensure central SOEs play a leading role in forming new productive forces and strengthening new growth drivers. Thank you.

Yicai:

In the past year, what progress have central SOEs made in promoting strategic restructuring and professional integration? In the coming year, which key areas will they focus on for restructurings and business integration? Thank you.

Li Bing:

I'll answer these questions. In 2023, the SASAC implemented the arrangements of the 20th CPC National Congress on accelerating efforts to improve the layout of the state-owned sector and adjust its structure. The SASAC intensified its efforts in restructuring the central SOEs and integrating their businesses, yielding positive results in four areas. First, we supported the implementation of national strategies and enhanced our capabilities. We have made continuous progress in optimizing resource allocation in fields such as data and information, leveraging the role of central SOEs as the "national team" to serve the needs of national strategies more effectively. Second, we improved the efficiency of resource allocation and the quality of development. We integrated cruise operation resources to establish platform companies and strengthened professional operational capabilities. The first domestically-built large cruise ship, Adora Magic City, completed its successful maiden voyage for commercial purposes. We facilitated the transfer of China International Water & Electric Corp, a subsidiary of China Three Gorges Corp, to China Communications Construction Co, and the transfer of National Bio Energy Group, under State Grid Corporation of China, to State Power Investment Corporation. We also promoted China Huaneng Group to conduct pilot operation and maintenance services for 22 new energy projects for 13 central SOEs. These efforts enabled companies to focus on their core businesses and achieve high-quality development. Third, we focused on nurturing new growth drivers and promoting the development of strategic emerging industries. We guided central SOEs to focus on mergers and integration, making innovation breakthroughs, and internal collaboration, so as to accelerate the development of strategic emerging industries. We held two centralized signing ceremonies for 25 key projects in business integration, covering strategic emerging industries like environmental protection, biotechnology, and new energy vehicles. Fourth, we have been gathering innovative resources and strengthening research and development capabilities. China Electronics Technology Group Corp completed restructuring of China Hualu Group Co Ltd, consolidating its strengths in the field of electronic information and enhancing its ability to supply key technological products. This helped to shore up key links in industrial chains and created synergistic advantages in areas such as smart manufacturing and data storage.

Next, the SASAC will, in accordance with the requirements outlined by the action plan guiding SOEs to deepen reform, focusing on the goal of steadfastly improving, expanding, and strengthening SOEs, further advance the work of restructuring and integration to deliver a substantive result. First, we will strengthen overall planning and enhance the effectiveness of restructuring and integration. Starting from improving the layout of the state-owned sector and adjusting its structure, and in line with the implementation of the 14th Five-Year Plan, we will carry out overall planning for the main directions and key tasks of restructuring and integration, improving the layout and adjusting the structure in a planned way and with the right pace. Second, we will give priority to serving national strategies and advance strategic restructuring and the establishment of new central SOEs in a prudent manner. We will focus on implementing strategies for innovation-driven development, coordinated regional development, and boosting China's strength in science and technology, manufacturing and cyberspace during the strategic restructuring and the establishment of new central SOEs. We will continue to promote the concentration of state-owned capital in important industries related to national security and the lifeline of the national economy, in important industries related to the national economy and people's livelihood, such as the provision of public services, emergency capacity building, and public welfare, and in forward-looking strategic emerging industries, and fully leverage the role of state-owned capital and central SOEs as the backbone and ballast of the economy. Third, we will focus on developing strategic emerging industries and vigorously promote professional integration. By leveraging the leading role of central SOEs, and in line with the characteristics of the integrated development of strategic emerging industry clusters, we will make greater efforts to conduct professional integration in the fields such as information communication, new energy, and equipment manufacturing. We will actively explore new arenas, seize new highlands, and shape new advantages by deepening strategic cooperation in the industrial chain ecosystem, and expediting our efforts to modernize the industrial system. Thank you.

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.

Jinan Times APP: 

In 2023, what significant progress did central SOEs make in advancing scientific and technological innovation, especially in building capabilities for developing original technology and national innovation platforms? In 2024, how will we guide enterprises to play a leading role in technological innovation and drive the building of a modern industrial system through scientific and technological innovation? Thanks.

Yuan Ye:

Good questions. As I just introduced, in the past two years, central SOEs have continued to increase investment in research and development, which has exceeded 1 trillion yuan for two consecutive years. We continue to optimize assessment indicators and encourage enterprises to increase investment in research and development. In the assessment of corporate profits, the investment in research and development is also added back to profits to encourage enterprises to strengthen investment in scientific and technological innovation. Mr. Zhuang Shuxin will give you a detailed answer.

Zhuang Shuxin:

Thank you for your attention regarding the sci-tech innovation of central SOEs. Sci-tech innovation is the country’s fundamental interest and the motive force for the development of enterprises. In 2023, the SASAC and central SOEs actively implemented the new system for mobilizing resources nationwide to make key technological breakthroughs, vigorously promoting sci-tech innovation with a strong sense of urgency and firm measures and further advancing the innovation efficacy.

First, central SOEs’ principal role in sci-tech innovation has been strengthened. Central SOEs have been organized to undertake a number of major national sci-tech tasks and key projects in technological innovation. They were deeply involved in the construction of a system of national laboratories and completed the rearrangement of major national laboratories in fields such as energy, engineering, and medicine. They made efforts to establish a number of national technological innovation centers and actively participated in the construction of international sci-tech innovation centers and regional innovation centers.

Second, the construction of innovation systems continued to progress. We have accelerated the breakthrough of key and core technologies, advanced the planning and construction of original technologies incubators, and implemented 11 specialized action plans with one aimed at strengthening target-oriented basic research. As Mr. Yuan mentioned, central SOEs’ investment in research and development exceeded one trillion yuan for two consecutive years, and 29 individuals and 20 teams from central SOEs have been honored with the National Engineer Awards. A group of academicians and experts from central SOEs have entered the pool of national sci-tech experts.

Third, high-quality innovative achievements emerged quickly. The demonstration project of fourth-generation nuclear power technology for fast reactors has been completed and put into operation. High-temperature gas-cooled reactors have been commercialized, the Shenzhou-16 and Shenzhou-17 spaceships were successfully launched, the C919 passenger aircraft had its debut commercial flight, and the 6G network architecture set a world record for long-distance transmission. Direct-drive offshore wind turbines have reached a world-leading level. Significant breakthroughs have been made in key materials, basic components, and foundational software. Central SOEs have led the formulation of a number of international, national, and industry standards.

In 2024, we will focus on strengthening enterprises’ principle role in sci-tech innovation, fully leverage central SOEs' role to boost China's strength in strategic science and technology, and prioritize the four key areas of work as follows.

First is to accelerate technological breakthroughs to foster the resilience of industrial and supply chains. We will promote the deep integration of enterprises into the national innovation system, actively undertaking major national sci-tech tasks. Focusing on key industrial chains in the manufacturing sector, key and core technological research will be carried out, and an updated version of the innovation alliance of central SOEs will be fostered, promoting collaboration among enterprises, universities, and research institutes and connectivity among large, medium, and small-sized enterprises. Utilizing the advantages of SOEs in application scenarios, we will drive the transformation and application of technological achievements.

Second is to enhance the leading role of original innovation and improve the industrial innovation system. We will encourage central SOEs to summarize major scientific subjects from economic, social, and industrial development needs and strengthen applied fundamental research, generating a batch of original achievements in cutting-edge fields. We will encourage central SOEs to steadily increase the research and development funding and advance the efficiency of sci-tech output, fueling development with higher technological contribution.

Third is to fortify the driving force of innovation and accelerate the shaping of new productivity. Highlighting strategic emerging and future industries, we will progress central SOEs with consistent strategic assessments, technological foresight, and benchmarking analysis, strengthening the planning to develop cutting-edge technologies, stepping up to foster innovative SOEs, and relying on technological innovation to open up new fields and channels and foster new driving forces and advantages for development.

Fourth is to create an innovative ecosystem to boost innovation vitality and power. We will guide central SOEs to take advantage of various national sci-tech policies; issue more policies to empower enterprises, deregulate, ease burdens, and reinforce positive incentives; implement in-depth digital transformation initiatives; and enhance digital and intelligent technologies to empower new industrialization. We will vigorously encourage dedication to scientific advancement and entrepreneurship and improve the sustained ability for innovation and value creation. Thank you.

Xinhua News Agency:

As mentioned in Mr. Yuan's response, this year's focus will continue to be on improving the quality of central SOE holding listed companies. With regard to this, as SASAC released a plan for reinforcing the quality of these companies in 2022, I would like to inquire as to the progress of related work and what measures the SASAC will take to promote the quality and efficiency of central SOE holding listed companies? Thank you.

Yuan Ye:

Thank you for your questions. It is crucial to improve the quality of central SOE holding listed companies. As I mentioned earlier, we have emphasized "one profit and five rates" in the target management system to motivate the ability of value creation for central SOEs. The requirement for listed companies is the same. In recent years, we have consistently focused on quality improvement of central SOE holding listed companies to increase investor returns. For detailed information on relevant work, I'll ask Mr. Xie to respond.

Xie Xiaobing:

Thank you. The previous discussions by our colleagues focused on high-quality development. Listed companies account for a large proportion of central SOEs and are an important part of central SOEs, as we have previously explained to our media friends before. Our high-quality assets are primarily held by listed companies. The high-quality development of listed companies is closely related to that of central SOEs. Just now, our work on promoting the high-quality development of central SOEs was introduced. Here, I would like to share what we have done in light of the characteristics of listed companies.

In recent years, we have collaborated with the China Securities Regulatory Commission (CSRC) and other relevant departments to promote the high-quality development of listed central SOEs. Our work has focused on several key areas:

First, we have contributed superior offerings to the capital market and have optimized its layout and function. In recent years, we have listed 21 companies on the A-share market, 14 of which are listed on the Science and Technology Innovation Board. These are companies with strong technological capabilities. At the same time, we have actively utilized these companies' platforms to conduct professional restructuring, incorporating quality assets into the listed companies. According to preliminary statistics, the value of integrated assets in the past two years has exceeded 300 billion yuan.

Second, we have ensured synergy between science, technology, industry, and finance. Through the platform of listed companies, we attracted relevant funds to bolster scientific and technological innovation capabilities. This effectively connected the "technology-industry-finance" chain, and made it more visible in the capital market. According to preliminary statistics, in the first three quarters of 2023, listed companies controlled by central SOEs invested 288.5 billion yuan in scientific research, with an average of 780 million yuan per company.

Third, we have maintained high standards in the disclosure of information from listed companies. Our listed central SOEs have adhered to the regulatory requirement of “taking information disclosure as the core." In the information disclosure quality evaluation conducted by the Shanghai and Shenzhen stock exchanges, nearly half of our listed companies were rated A, indicating a very high standard of information disclosure. At the same time, we have actively expanded our ESG reporting coverage, achieving 80% by the end of last year. According to our plans, we will achieve full coverage in the 2023 annual report disclosure.

Fourth, we have constantly enhanced our value creation and market recognition. We have strengthened regular and multi-level interactions with investors, achieving full coverage in performance briefings for three consecutive years. Both the chairman and general manager have attended the performance briefings of listed SOEs. In 2023, 12 listed central SOEs engaged in stock buy-backs, while 32 saw an increase in holdings by major shareholders. In 2022, the cash dividend payout ratio reached 44.6%. By mid-2023, 20 central SOEs had issued mid-term performance dividends totaling nearly 80 billion yuan.

Overall, listed companies controlled by central SOEs have remained focused on their core businesses, leading to a continuous increase in overall scale. Business performance has maintained a generally stable trend, with the industrial layout becoming more optimized and operation quality steadily improving. According to the third-quarter report of 2023, the total assets and net assets of the 383 listed companies controlled by central SOEs on China’s mainland have reached 53 trillion yuan and 17 trillion yuan, respectively. The operating revenue and net profit attributable to equity holders were reported at 18.63 trillion yuan and 1.06 trillion yuan, respectively. Overall, the return on equity (ROE) reached 7.53%.

Now, 154 out of the 383 listed companies are in strategic emerging industries, representing over 40% of the total. By the end of 2023, the market value of listed companies controlled by central SOEs on China’s mainland had reached 13.5 trillion yuan. We recognize that enhancing the quality of listed companies is a long-term endeavor requiring sustained efforts. Moving forward, we will concentrate on the following aspects to further improve their quality:

First, we will continue to build a listing pattern with a clear definition and incremental development. We will promote the general idea of "strengthening and improving a group of enterprises, adjusting and revitalizing a batch of enterprises, and cultivating and reserving a bunch of enterprises." This approach aims to steadily improve incremental growth, consistently deliver high-quality products to the capital market, and actively improve existing stocks. As a result, listed companies can intensively work in their industries to grow better and stronger, becoming leading entities in their sectors. On the other hand, we have resolved to proactively implement policies and resolutely adjust and revitalize the listing platforms of some enterprises that do not align with their main business or advantages.

Second, we will make continuous efforts to improve the standard operation of listed companies. We will enhance cooperation and communication with securities regulatory authorities to jointly promote the standardized operation of listed central SOEs and further improve the quality of information disclosure. At the same time, we should properly resolve the risks of listed companies and encourage them to set an example for honest and standardized operations in the capital market.

Third, further research will be conducted on incorporating market value management into performance assessments of central SOE leaders. In the early stages, we have encouraged central SOEs to include indicators related to value realization in the performance evaluation system of listed companies. Building on this, we will include the effectiveness of market value management in the assessment of central SOE leaders. This approach aims to guide them to pay more attention to the market performance of listed companies they manage. We will convey confidence and stabilize expectations promptly through market holding increases, buybacks, and other means and enhance cash dividends to better reward investors.

Thank you.

ThePaper.cn:

Recently, there have been widespread cold spells across the country, and all sectors of society are closely monitoring the energy supply. What actions did central SOEs undertake to ensure energy supply in 2023? What progress has been made? What are the key arrangements for follow-up work? Thank you.

Li Bing:

Your question is of great concern to society at present. In 2023, facing multiple severe challenges such as high temperatures, low water levels, typhoons, freezing rain, snow, and earthquakes, the SASAC and central SOEs resolutely implemented the major deployments of the CPC Central Committee and the State Council. They effectively played a crucial role in ensuring people's livelihoods and stabilizing production, supply, and prices. Various measures were taken to successfully complete key supply tasks during the peak demand periods of summer and winter, the Spring Festival, the two sessions, the Chengdu Universiade, and the Hangzhou Asian Games. These efforts effectively maintained economic and social stability and made a significant contribution to the sustained improvement of the domestic economy.

In 2023, central SOEs' safeguarding work in energy and power supply included several aspects:

First, the central power generation enterprises strengthened thermal coal inventory management. The thermal coal inventory was consistently maintained at a high level. Coal power units operated safely and efficiently, generating a total of 5.35 trillion kilowatt-hours of electricity throughout the year. This accounted for 52% of China's installed capacity and contributed to 63% of the country's electricity generation.

Central SOEs responsible for the power grid fully leveraged their strengths in optimizing the allocation of large power grid resources, thereby enhancing mutual support in balancing excesses and shortages. Throughout the year, a total of 4,761 cross-regional and cross-provincial power supports were organized, with the electricity volume reaching 20.9 billion kilowatt-hours. They controlled load management and capacity scale to the maximum extent, firmly maintaining the bottom line against power outages.

Prioritizing safety and compliance, central SOEs in the coal sector expanded their mining operations, spearheaded the implementation of the long-term price agreement mechanism for thermal coal, and maximized thermal coal supply. The cumulative coal production throughout the year was 1.13 billion tons, with an average daily output of 3.083 million tons, a year-on-year increase of 4.5%, hitting another record high.

Central SOEs in the petroleum and petrochemical sector fully utilized the potential of domestically produced and imported gas to ensure a safe and stable oil and gas supply. Cumulative sales of natural gas throughout the year reached 354.39 billion cubic meters, marking a year-on-year increase of 6.1%. Assets totaled 202.85 billion cubic meters, a year-on-year increase of 6.8%, and imports were 147.05 billion cubic meters, reflecting a year-on-year increase of 8.8%.

Moving forward, the SASAC will bear in mind the overall situation of safeguarding national energy security and economic operational security. It will strive to enhance the role of SASAC and central SOEs as the "backbone" and "cornerstone" in critical moments. The SASAC will supervise and guide central power generation SOEs, coal SOEs, power grid SOEs, and petroleum, petrochemical, and natural gas SOEs to follow unified arrangements. This will ensure the supply of essential services for people's livelihood and guarantee a warm winter and enjoyable holidays for the public.

In the long run, we will focus on accelerating the construction of new power systems. We will promote the building of peak-shaving power sources, such as gas power, pumped storage, and electrochemical energy storage, tailored to local conditions. Additionally, we will advance the construction of approved power generation projects and ensure their timely operation and grid connection. We will increase investment in technological innovation in strategic emerging industries such as energy storage, hydrogen energy, nuclear energy, and virtual power plants and continuously improve the long-term mechanism for ensuring energy supply. Thank you.

Securities Time:

Could you share the overall achievements of the campaign organized by SASAC for closer cooperation across industrial chains in 2023, and also the plans for this year? Thank you.

Zhuang Shuxin:

Thank you for your question. As we know, China has a large and comprehensive industrial system, but it also faces numerous bottlenecks and challenges. These require not only guidance from policy departments but also proactive efforts from enterprises, especially industry leaders, to efficiently link upstream and downstream operations and ensure smooth production and supply cycles.

Last September, SASAC, along with the Ministry of Industry and Information Technology, initiated the common chain campaign aiming to build closer collaborations across the industrial chain. By establishing platforms for cooperation and supply-demand matchmaking, we have promoted deeper collaboration between central SOEs and those in the industrial chains, working to build a new pattern of orderly competition and integrated development among large, medium, and small enterprises.

On one hand, we focused on building a new mechanism for cooperation across the industrial chain. Through joint ventures, increased investments, mergers, and acquisitions, we established mechanisms for supply-demand matching, joint project development, and shared results, enhancing the efficiency of industrial chain collaboration. We have also leveraged the strengths of industry leaders to create a new ecosystem featuring openness, shared benefits, integration, and win-win cooperation.

On the other hand, we focused on laying a solid foundation for the security and development of the industrial chain. We have strengthened innovation cooperation with enterprises in the industrial chain, jointly undertaking projects to strengthen foundations, improve weaknesses, and remake industrial basic capabilities, aiming to resolve the issues of a lack of foundational components and core technologies in the industrial system. We opened up the application scenarios of central SOEs to allow more products and services from the industrial chain to be included in the procurement catalog, starting from initial installations and editions. This has created conditions for the large-scale application of new products and technologies and accelerated the advancement of new industrialization.

By the end of last year, central SOEs hosted 13 events under the campaign, covering areas like machine tools, mobile information, rail transit, and low-carbon metallurgy in Beijing, Shanghai, Guangzhou, Shenyang, and other places. They released over 1,000 supply and demand lists, signed off over 5,000 agreements, and established deep cooperation with numerous enterprises.

Notably, the State Grid created the world's largest new energy cloud platform, providing a one-stop service for new energy planning, grid connection, and transactions. The platform hosts 17,000 companies, providing grid connection services for over 12,000 projects.

State Power Investment Corporation Limited (SPIC), through its contract-based cooperation model, has made solid strides in industrial chain development surrounding the "Guohe One" project, achieving 100% domestic substitution capability for entire machines by the end of 2023.

CRRC Corporation Limited has led the coordinated development of over 6,900 enterprises in the rail transit equipment chain, forming two world-class industrial clusters in Zhuzhou and Qingdao, with a global new vehicle sales market share exceeding 30%.

China Mobile fully upgraded its partnership program to connect and cooperate with enterprises across the industrial chain, conducting over 550 collaborative projects with key industry enterprises and providing over 150 billion yuan in supply chain finance services.

Going forward, SASAC and central SOEs will take more substantial measures to consolidate the campaign, significantly enhancing the resilience and competitiveness of the country's industrial chain.

We will further enhance coordination between the supply and demand sides. To further promote industrial integration and development, we will conduct more high-quality thematic activities, release more supply-demand lists, and attract more enterprises to join our campaign.

We will also innovate in how we conduct the campaign, organizing joint, high-level events in large-scale industries and enhancing cooperation to jointly build industrial clusters in regions with relatively sound industrial foundations.

We will continue to create cooperation outcomes. With continuous efforts in supply-demand connection, collaborative support, innovative cooperation, resource sharing, industry empowerment, and industrial integration, we aim to develop a number of effective, replicable cooperation models and create high-quality, influential demonstration projects. The goal is to promote the integrated development of upstream, midstream, and downstream enterprises as well as among big, medium, and small enterprises. Thank you.

Xie Yingjun:

Due to time limitations, we'll take one last question.

Cover News:

As indicated at the Central Economic Work Conference, China will deepen and upgrade its SOE reforms to strengthen their core functions and core competitiveness. 2023 marks the first year for China to implement the campaign for deepening and upgrading the SOE reform. Could you share with us the major progress since the campaign's launch and the future plans for advancing SOE reforms more effectively and substantially? Thank you.

Yuan Ye:

I'll take this last question. The three-year reform campaign from 2020 to 2022 has yielded positive results. The CPC Central Committee with Comrade Xi Jinping at its core has made the strategic plan of deepening and upgrading the SOE reform riding on the current positive momentum.

The latest round of SOE reform has distinctive characteristics of the era. Regarding the reform tasks, they can be broadly categorized into two main aspects. The first one refers to institutional reform, mainly aiming to consolidate the achievements made over the past three years of reform so as to realize the transition from a focus on quantity to a focus on quality. The emphasis is on breaking through some systemic and institutional obstacles that constrain the high-quality development of central SOEs and encouraging enterprises to genuinely operate in accordance with market-oriented mechanisms. The second task pertains to functional reform. It mainly involves the mission and responsibilities assigned by the new journey, focusing on the country's major needs. The goal is to continuously enhance the core functions and improve the core competitiveness of enterprises, effectively leveraging their roles of technological innovation, industrial control, and security support in the construction of a modern industrial system and the establishment of a new development pattern. 

The CPC Central Committee has made top-level designs for the new round of SOE reform, officially issuing the guidelines last year. The State Council has established a specialized work coordination mechanism and convened mobilization and deployment meetings to ensure comprehensive planning. Various regions, departments, and SOEs across the country have regarded the deepening and enhancement of reform as a vital political task. They are actively concentrating on practical measures, organizing support, and initiating the new round of reform with a commitment to a high standard and quality.

Currently, various regions and central enterprises nationwide have developed relevant implementation plans for the reforms. Related work is progressing steadily according to the schedule, and the effects are gradually becoming evident.

For example, in terms of optimizing the layout, over the past year, central SOEs have advanced strategic restructuring through market-oriented approaches, and have established a batch of new enterprises. Some 29 companies signed contracts for specialized integration projects in areas such as ecological and environmental protection, biotechnology, and intelligent connected vehicles. We have further promoted the optimization of resource allocation in this regard, as mentioned by Mr. Li just now. 

For instance, in the establishment of the modern enterprise system with Chinese characteristics, there has been further improvement in the operational standards of corporate boards. The development of external director teams has continued to strengthen, and the enforcement of managerial term limits and contractual management has been enhanced. The expansion and deepening of world-class initiatives such as "Dual Demonstration," "Scientific and Technological Innovation Action," and "Double Hundred Action" are underway, with exemplary enterprises effectively showcasing their leading role in these efforts.

In addition, in terms of improving supervision, we have revised the performance assessment methods for leaders of central SOEs. Specialized differential assessment methods have also been formulated for enterprises engaged in scientific research and design, heavy equipment manufacturing, grain reserves, and other areas. Furthermore, for companies aiming to strengthen technological research and development, promote the transformation of achievements, and develop strategic emerging industries, we have introduced a slew of targeted and effective support policies, striving to create a favorable environment for the high-quality development of enterprises.

This year is a crucial year for implementing deepened and enhanced reform actions, signifying the consolidation of past endeavors and the initiation of new challenges. SOEs will coordinate progress, ensure effective implementation, and strive to make breakthroughs in key and challenging areas. The key areas include the following aspects:

We will deepen reforms to optimize resource allocation. Focusing on serving major national strategies, we will further channel state-owned capital into crucial industries and key sectors vital for national security and the foundational aspects of the national economy. This entails concentration on public services, emergency capabilities, and areas of public welfare essential to the national economy and peoples' well-being. Furthermore, we will broaden our focus to cutting-edge strategic emerging industries. In our work, we will persist in implementing strategic restructuring and specialized integration, refine the budgetary allocation of state-owned capital, intensify efforts in the development of new industries and new tracks, promote the fundamental transformation of traditional industries, and increase the resilience and security of the industrial chain.

We will deepen reforms to enhance institutional mechanisms. On one hand, we will accelerate the refinement of a modern corporate governance system tailored to the characteristics of Chinese SOEs. This includes categorizing and optimizing the "pre-listed matters" of CPC committees (CPC leadership groups) to promote the scientific, rational, and efficient building of the board of directors so as to converting institutional advantages into developmental strengths. On the other hand, we will further improve market-oriented operational mechanisms, enhance the quality and scope of managerial term limits and contractual management, establish a precise, efficient, and orderly income distribution mechanism, and expedite the establishment of modern new SOEs.

We will deepen reforms to strengthen institutional guarantees. We will further clarify the rights and responsibilities of investors in regulatory matters, promoting centralized and unified supervision of operational state-owned assets, and better leverage the advantages of specialized, systematic, rule-of-law, and efficient supervision. We will further optimize the assessment system by implementing tailored evaluations for each enterprise and industry, and improving the precision, scientific basis, and consistency of policy provision. We will establish a coordinated and efficient system for supervising state-owned assets, effectively enhancing regulatory efficiency, safeguarding the security of state-owned assets, and fostering a favorable environment for the reform and development of enterprises.

Thank you.

Xie Yingjun: 

Thank you to all the speakers for the introductions, and also, thank you to all participating media friends. Today's press conference concludes here.

Translated and edited by Zhang Rui, Wang Qian, Xu Kailin, Yuan Fang, Li Xiao, He Shan, Liu Caiyi, Huang Shan, Wang Mengru, Zhang Junmian, Wang Ziteng, Liu Sitong, Zhang Tingting, Liu Qiang, Yan Bin, Wang Yiming, Guo Yiming, Qin Qi, Li Huiru, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.