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Opinion / Editorials

Vows to reform SOEs must be followed by right action

(China Daily) Updated: 2015-09-16 09:48
Vows to reform SOEs must be followed by right action

Journalists have found that Sinograin storage managers in Liaoning and Jilin provinces have been embezzling public funds by conspiring with illegal grain merchants to put cheaper, previously harvested grain in storage but paying the price of freshly harvested grain to merchants. [Photo/IC]

Amid clamors over an economic "hard landing", the central government just unveiled a new formula for further reform of State-owned enterprises.

This is a logical move given the current state of our economy and the strategic significance attached to the State sector.

The new formula is touted as an overriding "top-level design" with special focus on management mechanisms. This is more than appropriate, because problems abound at that level.

The rectification reports five central-government-controlled SOEs delivered on Monday in response to violation charges by Communist Party of China discipline watchdogs are a timely reminder of the imperative of SOE reforms.

As part of the high-profile anti-corruption campaign, graft busters had been dispatched to China National Petroleum Corporation, Dongfang Electric Corporation, State Grid, China Telecom, and China Mobile to sniff for violations.

None was innocent. Malpractices were rampant. Problems enumerated ranged from disregard for rules in appointment of executives, waste and embezzlement of public money, bribe taking, rent seeking, insider trading and various forms of behind-the-scene deals.

Like in all similar cases, the rectification reports were lists of fence-mending measures adopted in response, which is good. Problems exposed have to be addressed correspondingly.

But like always, none offers credible clues to adjustments targeted at loopholes in the management system. The new reform guideline is just supposed to plug the existing loopholes through systemic adjustments.

The guideline sets many parallel goals, each sounding ambitious, inspiring and sensible in itself. But it takes a lot of doing when bundled together into actual reform schemes for specific enterprises.

Since the new guideline has brought up the matter, there has to be matching measures to make sure promises of progress do not remain hollow slogans in the new round of reforms.

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