Beijing (People’s Daily) – China is continuing to promote the reorganization of centrally-administered state-owned enterprises (SOEs), as two major steelmakers, Ansteel Group Corp Ltd and Ben Gang Group Corp, started the process of merging and restructuring last week to create the world’s third-largest crude steel producer.
The government’s campaign to reform central SOEs has effectively optimized the structure of the state-owned capital and consolidated the basis of high-quality development, said a senior official at a news briefing on Wednesday.
The restructuring of central SOEs is not a simple matter of upscaling, but aims at amplifying strengths and competitiveness, said Weng Jieming, vice-chairman of the State-owned Assets Supervision and Administration Commission (SASAC), China’s top State asset regulator.
China has accelerated the strategic reorganization of central SOEs since the 19th National Congress of the Communist Party of China in 2017, with a series of restructuring projects involving six pairs of central SOEs completed.
China State Shipbuilding Corp Ltd was incorporated by restructuring two shipbuilding giants in November 2019 and now ranks first in revenue and net profits among worldwide ship producers. The merger has remarkably improved the international competitiveness of China’s shipping industry.
Sinochem Holdings Corp Ltd, a merger between the previous two largest state chemical firms unveiled in May 2021, has completed the integration of agricultural businesses of the two firms and is providing strong support for high-quality development of the agriculture sector.
Another key task of the restructuring is promoting professional integration among central SOEs, especially those with homogenized businesses and repetitive investments, so as to sharpen enterprises’ core competitiveness.
For instance, China set up China Oil and Gas Piping Network Corp (PipeChina) in late 2019 to forge an oil and gas market with effective transport through a nationwide pipeline network.
The country’s pipeline networks were primarily managed by the three state-owned energy giants－China National Petroleum Corp, China Petrochemical Corp and China National Offshore Oil Corp.
The new energy group has improved the level of interconnection, boosted the formation of a unified network, and ensured a safe and stable energy supply for the country, Weng said.
In April 2021, China Satellite Network Group Co Ltd became the first central SOE headquartered in Xiong’an New Area. Gathering central SOEs’ strengths in the satellite field, its establishment weighs strategically in the development of satellite-based internet services, according to Weng.
In response to the nation’s development strategies, China will next impel resource integration in areas including logistics and power transmission and distribution equipment manufacturing and fix technological bottlenecks, Weng said.
Weng also mentioned that the country will form new central SOEs and promote the concentration of state-owned capital in areas related to the national economy and people’s livelihood, public services, emergency capacity building and public welfare, as well as emerging industries of strategic importance.
China currently has 97 central SOEs. Those enterprises reported stellar performance in the first half of 2021. Their half-year net profits surpassed the trillion yuan milestone for the first time, totaling 1.02 trillion yuan ($157 billion) and surging 133.3 percent year-on-year, SACAC data showed.