In this undated photo, workers clean a molten steel holder at Dalian Special Steel Co Ltd in Dalian, Liaoning province, China. (LIU DEBIN / FOR CHINA DAILY)
BEIJING – China is encouraging its central state-owned enterprises (SOEs) to gradually adjust their industrial structure, the country's SOEs regulator said Monday.
The SOE sector has seen a gradual reduction in its share of the overall economy since 1978, but its competitiveness has been gaining strength, said Peng Huagang, spokesperson for the State-owned Assets Supervision and Administration Commission (SASAC).
The government will encourage central SOEs to capitalize on their assets via means such as IPOs and mixed-ownership reform to channel more capital into strategic and prospective industries
Peng Huagang, Spokesperson, State-owned Assets Supervision and Administration Commission
SOEs will phase out from some sectors while expanding presence in others. But it might be difficult to define a clear share of the SOEs' presence in certain sectors, Peng pointed out.
Central SOEs in traditional sectors should upgrade their businesses by developing new technology and industries, said the spokesperson.
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SASAC data showed that central telecom SOEs saw new businesses such as data and information and communication technology contribute over 51 percent to their overall revenue in the first quarter of this year, up 13.4 percent year on year.
The government will encourage central SOEs to capitalize on their assets via means such as IPOs and mixed-ownership reform to channel more capital into strategic and prospective industries, he said.
Central SOEs will see healthy, sustainable, and high-quality development as they gradually adjust their industrial structures, Peng added.
SOE PROFITS UP 19.4%
The central SOEs saw their net profits surge 19.4 percent in the first quarter of the year, according to the regulator.
The total revenues of central SOEs increased by 8.7 percent year-on-year to 6.4 trillion yuan (about US$1.02 trillion) in the first three months.
ASSET-LIABILITY RATIO DROPS
According to SASAC, the average asset-liability ratio for central SOEs stood at 65.9 percent by the end of March, down by 0.4 percentage points compared with the beginning of this year.
The country's SOE sector has become a major target for the ongoing deleveraging drive, which aims to rein in mounting debt and guard against financial risks.
The government will continue to reduce leverage and liability among central SOEs, said Peng.
More efforts will be made to dispose of non-performing assets and regulate open-book credit and inventory, high-risk businesses, debt investment and risks in other areas like international expansion, Peng said, adding that asset management and capital utilization efficiency should also be improved.