China picks six state-owned companies for reform trials

Reforms have been welcomed even though they haven't included major state-dominated sectors such as aviation, oil and communications.
By Ananth Baliga   |   July 15, 2014 at 9:21 AM   |   Comments

| License Photo
BEIJING, July 15 (UPI) -- China picked six state-owned companies Tuesday that will undergo reform trials, giving these companies more control over executive hiring and independent functioning.

The State-owned Assets Supervisory and Administrative Commission selected State Development & Investment Corp. and COFCO Corp. for a switch to state capital management that will have the government use its regulatory authority to primarily supervise how efficiently capital is used.

China National Building Materials Group Corp. and China National Pharmaceutical Group Corp. will experiment with mixed ownership and board-led hiring of top management that will allow the board of directors to hire, evaluate and pay top executives.

China Energy Conservation and Environmental Protection Group and Xinxing Cathay International Group will also be used to try out a board-led human resources management.

The regulator hasn't imposed any limits on the experiment and said they will include more companies at an appropriate time.

Chinese regulators have been criticized heavily for interfering in the working of state-owned companies, many times causing these companies to have stagnant growth. This reform plan was outlined last year at the Communist Party's annual meeting of members.

Wen Zongyu, director of the state-owned economy bureau at the Ministry of Finance's Institute of Fiscal Science, said the move towards reform was welcomed, saying that it could boost efficiency in these companies. But he did say the reforms failed to include any major state-dominated sectors, such as oil, telecommunications, power and aviation.

Follow @antbaliga and @UPI on Twitter.
Contact the Author
© 2014 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
Most Popular
Russian currency crashes Russian currency crashes
Navy tests MQ-8C unmanned helos Navy tests MQ-8C unmanned helos
New submarine set for commissioning New submarine set for commissioning
SM-6 long-range interceptors on target in U.S. Navy test SM-6 long-range interceptors on target in U.S. Navy test
Sweden plans to replace its Defense and Security Export Agency Sweden plans to replace its Defense and Security Export Agency
Trending News
Around the Web