Restructuring of central SOEs to pick up pace

China will persist in advancing the strategic restructuring and specialized integration of its centrally administered State-owned enterprises in 2025, driving the quality enhancement and upgrade of key industries, said a senior government official.

Speaking at a two-day meeting with the heads of central SOEs in Beijing, Zhang Yuzhuo, chairman of the State-owned Assets Supervision and Administration Commission of the State Council, or SASAC, said that central SOEs will focus on enhancing their functions and improving their core competitiveness by deepening reform, strengthening innovation and optimizing structures next year.

The meeting, which concluded on Tuesday, stressed that the government will continue to encourage central SOEs to develop artificial intelligence (AI) technologies and strategic emerging industries, according to a statement released by the commission late on Tuesday.

Strategic emerging industries in China include sectors such as energy-saving and environmental protection, next-generation information technology, biotechnology, high-end equipment manufacturing, new energy, advanced materials and electric vehicles, said the SASAC.

The annual Central Economic Work Conference held recently in Beijing underlined that efforts should be made to adopt forward-thinking arrangements for major technological projects, conduct large-scale demonstrations for the application of new technologies, products and scenarios, launch an AI Plus initiative, nurture industries of the future and boost China's strategic scientific and technological strength.

After establishing China Resources Recycling Group Co Ltd, a new central SOE in Tianjin in October, China launched another SOE specializing in data technology in Shanghai last week.

With a registered capital of 10 billion yuan ($1.37 billion), the company aims to create a national-level logistics big data platform by integrating and utilizing data across road, rail, waterway, aviation and port sectors. It is designed to streamline logistics, information flow and capital flow, leveraging digital technologies to improve operational efficiency and reduce overall logistics costs for its customers.

From January to November, central SOEs invested 2 trillion yuan in strategic emerging industries, a year-on-year increase of 18.7 percent, with the capital proportion in total investment exceeding 40 percent for the first time, the SASAC said.

As China enters a new era of green and innovation-driven growth, Zhang said that central SOEs will speed up the green transformation of industries such as steel, nonferrous metals, chemicals and building materials next year.

He said that the government will support central SOEs in strengthening the integrated development of industrial chains through targeted initiatives, lead the formation of industry alliances, regularly publish supply and demand information, and foster the seamless integration of upstream, midstream and downstream sectors, encompassing businesses of all sizes.

Liu Xingguo, a senior researcher at the China Enterprise Confederation in Beijing, said that under the targets set by the SASAC, the revenue share of central SOEs from strategic emerging industries is expected to reach 35 percent by 2025. As a result, their investments will be primarily focused on these industries next year.

"These investments will be directed toward areas such as machine tools, digital technologies, artificial intelligence, quantum technology, industrial robots and healthcare sector," Liu said.

Liu Ruiming, executive dean of Renmin University of China's Research Institute of State-owned Economy, expressed a similar view.

"The restructuring, specialized integration, mergers and acquisitions of central SOEs will place greater emphasis on industrial chain integration, with a focus on high-end manufacturing and digital-related industries in 2025," he said.

China conducted a number of restructuring and integration activities in recent years to promote central SOEs' resource allocation efficiency.

For example, China Electronics Technology Group Corp completed restructuring of China Hualu Group Co Ltd late last year, consolidating its strengths in the field of electronic information and enhancing its ability to supply key technological products.

zhongnan@chinadaily.com.cn