Post-Olympic SOEs to Accelerate Reform and Reorganization

Li Rongrong, director of the State-owned Assets Supervision and Administration Commission of the State Council, stated on the 10th that after the Beijing Olympics, state-owned enterprises will speed up reforms and reorganizations. The reorganization of central enterprises will shift from a voluntary portfolio to SASAC's initiative. A considerable number of companies that do not belong to the country’s economic lifeline and national security will enter the market competition. .
According to the adjustment of the state-owned economy, Li Rongrong said that the target of reducing the central enterprises to 80-100 by 2010 will remain unchanged. In recent years, the restructuring of state-owned enterprises has continued to increase. From 2002 to 2007, the number of state-owned enterprises was reduced from 158,700 to 115,100. The number of central enterprises was reduced from 196 to 149.
The central enterprises have made positive contributions to safeguarding the Beijing Olympic Games. For example, construction companies have successfully completed the construction of Olympic venues, communications companies have improved network security and ensured smooth communication between the Olympics, power companies have guaranteed the power supply during the Olympics, and oil and petrochemical companies have increased their inventory to supply oil.
Central enterprises have played a special role in special periods. In the face of the "SARS" of 2003 and the 2008 snow and ice freezing disaster and the Wenchuan earthquake, the central enterprises have made no contribution to the fight against disasters and the protection of economic and social stability, regardless of conditions and costs.
In the power industry, the overall strength of Chinese companies is weak. In terms of the country’s power generation, the central enterprises account for only 40%. However, Li Rongrong emphasized that the five major power groups currently have no restructuring plan.
In contrast, Li Rongrong emphasized that the reorganization of the central enterprise's real estate business is inevitable. "We have approved the real estate industry as the main business, the total number of no more than 15 companies, a considerable part of the company's real estate business just as a transition." He said that without scale, it is difficult to reduce the cost, and ultimately will withdraw from the market.
Li Rongrong said that there are a lot of rumors about the state-owned shares will be reduced in the near future, a lot of market speculation, "state-owned listed companies to make a positive contribution to the healthy development of China's securities market." He said that for most state-owned enterprises, especially the central enterprises, they still have to maintain absolute control.
"Of course, these shares can be circulated, but in order to maintain the controlling status of the state-owned economy, it is not possible to reduce holdings in large numbers, or to say that it is impossible to reduce holdings for a considerable period of time." Li Rongrong emphasized that the SASAC is working with the CSRC and other departments. Real-time monitoring of state-owned shares in and out of the securities market.