SOEs to set sights on global marketplace

Infrastructure investment is regarded as a major stimulus for economic recovery.

For the third quarter, GDP expanded 7.8 percent over the same period a year earlier, compared with the second quarter, when it grew by 7.5 percent.

Standard Chartered Bank reported that the main strategy of reform on SOEs also lies in changing their business environment, which means that only the fittest survive.

"Enterprise development must experience marketization, securitization, socialization and internationalization," said Cheng Wei, director of macroeconomy and strategy development at the State-owned Assets Supervision and Administration Commission research center.

"Highly efficient State-owned assets deployment and industrial structure deployment are key to opening up industries and breaking up monopolies," Cheng said.

"Establishing and developing competitive global corporations is the target of reform for the central SOEs," Cheng added.

Huang Shuhe, vice-chairman of SASAC, said that as China's influence has risen on the international stage, there is a need for industrial conglomerates with strong competitiveness matching China's global stature.

SASAC set as its top priority the development of 30 to 50 of 112 central SOEs into top multinationals during the 12th Five-Year Plan period (2011-15).

Forty-four central SOEs are listed on this year's Fortune Global 500, with China Petrochemical Corp, China National Petroleum Corp and State Grid Corp among the top 10.

In a bid to accelerate central SOEs' globalization, SASAC is requiring them to increase overseas business income to half of total revenues, up from fewer than 38 percent at present.

"We will spare no effort to promote the international competitiveness of the central SOEs, which are requested to shift from low-end industrial chains and concentrate on premium overseas markets," said Liu Nanchang, director of the Performance Evaluation Bureau at SASAC.

Overseas assets of Chinese companies, which total more than 15,000 branches worldwide, are valued at more than $1 trillion, with half coming from State-owned enterprises, according to the commission.

SASAC said that as a mainstay of the domestic economy and China's "go abroad" process, central SOEs are destined to become worldwide industrial giants that will be competitive with foreign companies.

SOEs that are pillars of the economy include those engaged in telecommunications, power generation, petroleum, aviation and shipping.

In April, SASAC required central SOEs to increase profits by at least 10 percent this year. Data from the Ministry of Finance show that from January to September, central SOEs generated total profits of 1.3 trillion yuan ($213.7 billion), an increase of 16.3 percent year-on-year.