Professor's View丨Professor Chen Yugang: The three-year action plan for SOE reform is coming to the final year. How to promote high-quality development of SOEs?

In 2022, the three-year action plan for SOE reform is coming to the critical and final year. The Party Committee of the State-owned Assets Supervision and Administration Commission of the State Council held a special meeting on February 22nd. At the meeting, it was pointed that focusing on the goal of strengthening, expanding, and increasing the returns on state capital and enhancing the strength, quality, and size of SOEs, and accelerating in the construction of world-class enterprises, we should strengthen research on major theoretical and practical issues of state-owned assets and SOEs, and continue to promote the intensified development of SOE reform.

The reform of "two types of companies" has become the main task of SOE reform

"Two types of companies" are professional platforms for the market-oriented operation of state-owned assets. In the three-layer state-owned assets supervision framework of "SASAC - state-owned capital investment and operating companies - SOE", "two types of companies" are the core of building the "arm's length" between the government and enterprises, which's a watershed that reflects the separation of government and enterprise, separation of government and capital, and separation of ownership and management rights.

According to incomplete statistics, from 2013 to the end of 2021, 36 provincial-level SASACs have reorganized more that 150 state-owned capital investment and operating companies, and have explored and accumulated preliminary experience in the way of reorganization and establishment, mode of investment and operation, scope of authorization, and role play. Among them, Guangdong, Shanghai, Tianjin and other places are more representative. For example, Hengjian Holding, a state-owned capital operating company in Guangdong Province, gives full play to its platform advantages, focuses on the key links and core enterprises of strategic industrial clusters, supports high-quality development of the industry, and has successfully built a “100 billion-level” fund group to help industrial transformation and upgrading in Guangdong.

In this regard, Professor Chen Yugang from the School of Business and the Enterprise Research Institute of Sun Yat-sen University, said in an interview with the 21st Century Business Herald that the development of "two types of companies" in Guangdong has three characteristics and advantages. First, the large size of state-owned capital and the adequate market-oriented operation; Second, the professionalism of "capital management"; Third, the broad vision of capital investment and operation, not limited to supporting the industrial development of Guangdong, which can consider the overall layout and adjustment of capital from the perspective of national strategy.

With the deepening of the current round of SOE reform, the reconstruction and establishment of "two types of companies" are being further accelerated. As one of the most innovative new measures in current round of reform, deepening the pilot reform of "two types of companies" has become a main task of the reform of state-owned assets and SOEs, and also an important breakthrough to promote the substantial results of current round of state-owned assets and SOEs reform.

Professor Chen Yugang said in the interview that it is of great significance to evaluate the investment and operation of the provincial-level "two types of companies". First, it can reflect the phased achievements of the reform of SOEs and whether they have shifted from supervising enterprises to supervising capital. Second, in the process of studying the actual operation, it can be found that what role the "two types of companies" have played in continuously enhancing the competitiveness, innovation, control, influence and anti-risk capabilities of the state-owned economy.

Promote the high-quality development of state-owned capital operating companies

To promote the high-quality development of state-owned capital operation companies, it is necessary to base on the sound foundation formed by the reform of state-owned capital operating companies, clarify the strategic direction of high-quality development, and take multiple measures to solve the remaining problems.

In this regard, Professor Chen Yugang suggested: First, it is necessary to help the market to better distinguish the functional positioning of the "two types of companies". State-owned capital investment companies focus more on serving the national strategy, mainly as strategic investors, investing in important industries and key fields related to the lifeline of the national economy and security. While state-owned capital operating companies should focus on the rate of return on state-owned capital to achieve appreciation of state-owned capital, mainly financial holdings.

Secondly, due to the high degree of specialization in capital operation, the "two types of companies" need to establish and promote a market-oriented talent introduction mechanism, establish an effective incentive mechanism, and further build a talent team with complex knowledge background. Finally, the "two types of companies" are encouraged to carry out in-depth cooperation with relevant majors in colleges and universities to conduct research in industries, mergers and acquisitions, investment and other fields. On the one hand, the advantages of research resources of colleges and universities can be brought into play. On the other hand, they can cooperate with colleges and universities to cultivate relevant professionals.