State capital key to scitech prowess

China's State asset and State enterprise reforms are a key plank of economic restructuring and should be advanced through a new round of deepening reforms to seize development opportunities and accelerate the building of more world-class companies, officials and experts said.

China has taken a major step toward a foundational, comprehensive law on State-owned assets, with a draft submitted for first reading at a session of the Standing Committee of the National People's Congress.

Legal experts said the legislation would strengthen the framework for more efficient governance of State-owned assets.

The draft comprises 62 articles across seven chapters. It seeks to standardize management and oversight, and aims to ensure lawful protection and efficient use of assets to promote high-quality development of the State sector.

Authorities called for optimizing corporate management and operations, accelerating organizational and process reforms, pushing flatter and smarter structures, cutting management layers and shortening decisionmaking chains to sharpen sensitivity to market shifts and industry trends, as well as drive efficiency gains.

State-owned enterprises play a significant role in consolidating and extending the economy's steady improvement and must raise standards for their own operations, with a focus on value creation, said Zhang Yuzhuo, chairman of the State-owned Assets Supervision and Administration Commission under the State Council.

Zhang said State-owned enterprises should keep expanding effective investment and move early to plan and roll out major projects and flagship programs in key areas such as infrastructure, energy and resource security, and carry out forward-looking industrial deployment.

The emphasis is on large-scale equipment renewal, consumer-goods trade-in schemes, the implementation of major national strategies, and capacity building for security in critical sectors, he said.

The first review of the draft State Assets Law marks a new stage in the rule-of-law framework for State asset management, guided by systemic planning to support high-quality development, said Shu Wenqi, deputy director of China City Development Academy.

The draft focuses on planning and layout, and aligns with the 15th Five-Year Plan (2026-30) task of accelerating a new development paradigm. It is also a necessary step to improve the socialist market economy at a higher level, Shu said.

Over the long term, using the law to optimize the allocation of State capital is a key institutional underpinning for high-quality growth and economic security, helping "national strategic assets" better serve the broader agenda of Chinese modernization, Shu added.

Research and development spending by centrally administered State-owned enterprises has grown an average 6.5 percent annually, topping 1 trillion yuan ($140 billion) for three straight years and reaching 1.1 trillion yuan last year, SASAC said. Basic research accounted for 8.8 percent of the total — close to 100 billion yuan — for work in frontier fields.

As a core component of the nation's strategic science and technology strength, central SOEs have the responsibility, foundation and conditions to play a bigger role in building China into a scitech power, Zhang said.

Furthermore, they should strengthen innovation, advance high-level self-reliance in science and technology, step up efforts in key core technologies, raise the share of basic research, build national key labs, deepen original-technology incubators and deliver a batch of original, leading breakthroughs, he said.

Li Xuenan, professor of finance and director of the China Industrial Policy Research Center at Cheung Kong Graduate School of Business, agreed, calling State capital a "sower" in basic research.

"Private firms often lack incentives to invest in basic research, so State capital can plant the seeds for long-term technological progress,"Li said.

renqi@chinadaily.com.cn