A long-awaited pilot scheme to overhaul state-owned enterprises (SOEs) is disappointing and too minor to make much difference to the market, according to a commentary published by the Hong Kong Economic Journal on Wednesday.
The State-owned Assets Supervision and Administration Commission unveiled a four-fold pilot reform scheme Tuesday, including two components that had been expected — restructuring SOEs into state-funded investment companies like Singapore’s Temasek Holdings and letting private capital invest in SOEs.
But observers said the other two aspects of the scheme — enabling SOEs to name, review and compensate management and deployment of staff from the Central Commission for Discipline Inspection — add little to the reform process.
China National Cereals, Oils and Foodstuffs Corp, also known as COFCO Group, and State Development and Investment Corp. are the first two firms to be turned into capital investment companies as part of the pilot scheme.
And Sinopharm Group Co. Ltd. and China National Building Materials Group Co. will be the first to test a hybrid shareholding structure of state and private capital. SASAC had been expected to include much bigger companies like China Mobile Ltd. (00941.HK) and PetroChina Co .Ltd. (00857.HK) on the pilot list.
Excluding massive SOEs from the pilot scheme could signal problems finding private partners with enough capital to bet on companies valued in the hundreds of billions, if not trillions, of yuan the commentary said.
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