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'Double hundred action' to boost SOE reforms

By ZHONG NAN in Guangzhou | China Daily | Updated: 2020-10-28 08:59
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Staff members work at a workshop in CRRC Qiqihar Rolling Stock Co Ltd in Qiqihar, Northeast China's Heilongjiang province, on April 10, 2020. [Photo/Xinhua]

China will continue to promote the "double-hundred action" to enrich the upcoming three-year action plan for reform of State-owned enterprises, which is expected to sharpen their core competitiveness and strengthen dynamism for sustained growth, senior officials said on Tuesday.

The "double-hundred action", or shuangbai action, is a campaign led by the Leading Group for State-owned Enterprises Reform of the State Council. It selects more than a hundred subsidiaries of the centrally-administered SOEs, and more than a hundred local SOEs to implement reforms such as taking the lead in making breakthroughs in key fields and links of reform, between 2018 and 2020. The campaign constitutes part of the central government's efforts for deepening SOE reforms to boost productivity and make huge companies more marketized.

In addition to pushing the mixed-ownership reform in an active yet steady way during the three-year action plan period, the headquarters of SOEs must guide their subsidiaries taking part in the "double-hundred action", to review their works, formulate reform plan and goals for the next three years. All the documents should be submitted to the government before the end of December, said Weng Jieming, vice-chairman of the State-owned Assets Supervision and Administration Commission of the State Council.

Since the "double-hundred action" has been implemented for more than two years, over 400 SOEs have participated in the campaign and achieved a series of reforms in key industries and operational links. More than 80 percent of these companies have established a board of directors, with a majority of directors from outside of the companies, according to data released by the SASAC.

More than 200 of them have implemented mixed-ownership reforms in an orderly manner, and some have already listed on the stock markets.

As the three-year action plan will fully promote the contract-based management mode in SOEs in a number of sectors to achieve market-oriented employment system by 2022, this requires companies involved in the "double-hundred action", as pioneer companies, to complete these goals by the end of this year, he said.

Therefore, they must accelerate the pace of strengthening the modern corporate structure, introducing last place elimination system and developing sound market-oriented operating mechanisms, said Weng.

Over the next three years, a sound incentive and restraint mechanism should be used as the power and source to fully mobilize the enthusiasm, initiative and creativity of officials and workers in enterprises, he said.

"The reform has not only created more commercial vitality and expanded SOEs' sales channels, but also introduced a market-oriented remuneration system to better reward outstanding performance and incentivize innovation," said Zhang Xiaobin, chairman of Guangzhou-based China National Electric Apparatus Research Institute Co Ltd, a subsidiary of China National Machinery Industry Corp, the nation's largest machinery maker by production capacity.

To better encourage innovation, about 90 percent of its employees from research and development departments are able to hold the company's shares, and its net profit reached 277 million yuan ($41.27 million) in 2019, up 298 percent from the amount generated in 2016.

Li Donglin, chairman of Hunan-province based CRRC Zhuzhou Electric Locomotive Research Institute Co Ltd, a subsidiary of China Railway Rolling Stock Corp, the country's largest rolling stock manufacturer by production volume, said the company has not only gradually removed the administrative level for managers in many of its units, but also encouraged managers to compete for posts and recruited capable managers from private companies.

Peng Huagang, secretary-general of the SASAC, said solid steps will also be taken in implementing the three-year action plan for SOE reform. The task of relieving SOEs of their obligation in undertaking social programs will be essentially completed this year.

SOEs will be supported in enhancing basic research and innovation, advancing research on critical technologies, and vigorously promoting entrepreneurship and innovation, he said.

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