China expected to unveil action plan on SOE reform early next year

BEIJING -- A three-year action plan on the reform of State-owned enterprises (SOEs) is expected to be rolled out in the first quarter of 2020 to optimize the use of State-owned assets and spur innovation, Economic Information Daily reported Thursday.

Under the guideline, the mixed-ownership reform will be expanded and strategic restructuring will be strengthened in sectors including coal and electricity, steel and non-ferrous metal, said the newspaper.

Meanwhile, better management of State assets to invigorate the real economy and cutting overcapacity should also be pursued in the SOE reform, Zhou Lisha, a researcher at a research institute of the State-owned Assets Supervision and Administration Commission of the State Council, told the paper.

SOEs should improve their incentives in the field of science and technology innovation and use stock options, dividends and other such means to encourage creativity, Zhou added.

Reforms should also be strengthened to adapt the SOEs to innovation and lead the transformation of their economic structure, said Zhu Changming, a partner at Sunshine Law Firm.

China has taken a series of measures to invigorate its SOEs this year including the mixed-ownership reform and the comprehensive reform of pilot areas in Shanghai, Shenzhen and Shenyang.

The combined profits of China's SOEs rose 5.4 percent year-on-year to 2.94 trillion yuan (about $418 billion) in the first 10 months, according to the Ministry of Finance.