Profits gain as local SOEs deepen reform

2018-03-09 02:27:25 GMT2018-03-09 10:27:25(Beijing Time) Xinhua English

TAIYUAN/SHENZHEN, March 8 (Xinhua) -- Li Qiuxi remainschairperson of a provincial state-owned enterprise (SOE), thanks tothe fulfillment of the annual revenue and profit growth targets setin a letter of responsibility last year.

Under the contract Li signed with the Shanxi state-owned assetswatchdog in February 2017, one target for Fenjiu Group, the firstpilot SOE in the contractual management reform in the province, wasto increase its annual profit of the liquor sector by 25 percent.Otherwise, Li would be dismissed from his post with thecompany.

Far above the target, the profit of the liquor sector of FenjiuGroup, one of the country's leading liquor brands, increased by 68percent year-on-year last year. Other major performance targets inthe contract were also achieved.

The pilot reform has been extended to 17 SOEs in coal-richShanxi, including Taiyuan Iron and Steel (Group) Co., Ltd andShanxi Coking Coal Group.

Contractual management is a major SOE reform in Shanxi,prompting SOEs to speed up structural adjustment for high-qualitydevelopment through clear and scientific performance assessment,said Wang Yixin, vice governor of Shanxi.

Reforms will be advanced in state capital and SOEs, according tothe government work report delivered by Premier Li Keqiang to thefirst session of the 13th National People's Congress(NPC), China'stop legislature, on March 5.

"Our SOEs should, through reform and innovation, becomefront-runners in pursuing high-quality development," said thereport. Reforms introducing mixed ownership in SOEs will be carriedforward prudently.

Chinese SOEs saw 23.5 percent profit growth last year thanks tocontinued reform to boost efficiency and vitality, official datashowed.

SOE reform, aimed at improving efficiency and competitivenessthrough innovation, remains a priority for local governments thisyear. The southern coastal city of Shenzhen, Guangdong Province,has targeted growth of 9 percent or more in the total profit ofmunicipal SOEs this year.

The city will comprehensively push ahead mixed ownership reformthis year and develop first-class enterprises with globalinfluence, according to Peng Haibin, director of the ShenzhenState-owned Assets Supervision and Administration Commission.

In northeast China, progress in SOE reform has bolstered theeconomy in the old industrial base which has experienceddifficulties in recent years.

In Liaoning Province, Liaoyang Petrochemical Company reportedprofit for the first time in 13 years in 2017 and Ansteel Groupalso turned losses into profit last year.

After dealing with zombie businesses, Ansteel ended losses forthe past five consecutive years and achieved profit of 1.5 billionyuan (237 million U.S. dollars) in 2017.

"The cutting of low-efficiency production capacity has providedroom for Ansteel's shift from survival to development," said YaoLin, general manager of Ansteel.

It is important to build a diversified shareholding structure,accelerate innovation, and foster high-end talent for betterdevelopment of firms, said Dai Jishuang, chairperson of state-ownedShenyang Blower Works Group in Liaoning. Enditem