Economic Information Daily, Guangming Online and Other Media Publishes a Signed Article by Professor Chen Yugang of Business School "From Market Value Management to Value Creation Management: Exploring the Extended Growth Path of State-owned Enterprises"

The article "From Market Value Management to Value Creation Management: Exploring the Extended Growth Path of State-owned Enterprises" written by professor Chen Yugang and Ph.D. student Lu Jihua (National Social Science Fund project - periodical research results of "Study on Reform and Innovation of State-owned Enterprises Supervision System And Innovation", led by professor Xin Yu), after being published full-text in Economic Information Daily, Guangming Online and other mainstream media, it has achieved positive social effects.

The summary of the article is as follows:

In accordance with the work plan and requirements of the Central Leading Group for Comprehensively Deepening Reform, the SASAC issued the "Plan for Reforming the Authorized Operating System of State-owned Capital" (hereinafter referred to as the "Plan"). The "Plan" institutionalized the requirements of the 19th National Congress of the CPC on managing capital. The core of the change from managing enterprises to managing capital is to adjust the production relations, from managing enterprises and corporate governance to capital operation and management. The change of production relations, on the one hand, by investing in high-quality bids, it has improved the efficiency of the use of state-owned capital,  seized the development opportunities of strategic emerging industries and further liberated and developed productivity; On the other hand, through the orderly withdrawal methods such as de-capacity, funds were withdrawn for investment, the flow of state-owned capital was improved, and the sustainable development of state-owned capital has been realized.

At the same time, needless to say, due to the combined effects of various subjective and objective factors, in the process of the transformation of state-owned assets from managing enterprises to managing capital, many contradictions existing in the stage of managing enterprises will evolve and develop with the advancement of the reform, and eventually a series of new contradictions will also arise in the stage of managing capital. At this point, with a down-to-earth spirit and starting from the current situation, we believe that state-owned asset managers can adopt a new method of "value creation management" to help their investment decisions. Value creation management will provide state-owned assets managers a set of scientific and effective investment analysis system, enhance their professional skills and help them make correct investment decision, and innovate the original "market value management" model in the process of changing from managing enterprises to managing capital, to realize the transformation from "low capital efficiency" industries to "high capital efficiency" industries and from "low strategic value" industries to "high strategic value" industries, and further liberate and develop productivity.

Comparing market value management with value creation management, it can be seen that value creation management takes the maximization of capital utilization efficiency as the primary goal and focuses on quality, that is, not only the "quantity" of market value, but also the "quality" of value creation. The SASAC will change from focusing on the market value management of each enterprise to focusing on the value creation of each enterprise, so as to realize the entry and withdrawal of state-owned capital and complete the management of state-owned capital. The SASAC will realize the withdrawal of state-owned capital from inferior enterprises and invest state-owned capital in enterprises with strategic investment significance and large profit margins.

The SASAC and state-owned assets managers should take further liberating and developing productivity as the main goal in the process of changing from managing enterprises to managing capital, take into account the adjustment of production relations based on the level of residual value, transform the original market value management into a new value creation management, and take a new path for the state-owned capital to reply on both the endogenous growth of its own funds and the extended development of private equity investment funds.