SOEs need to fullfil their due function

Potential homebuyers examine a property project model in Nanjing, East China's Jiangsu province, Feb 28, 2016. [Photo/VCG]

Reports?show that State-owned enterprises have purchased 27 of the top 50 most expensive pieces of land for commercial development nationwide. They did it despite the fact that discipline requires them to exit from the realty industry. It is time to deepen the SOE reform and better regulate them, says Beijing News:

As early as 2010, non-realty SOEs were required to exit from the industry and concentrate on their own fields of business. Last October that order was reiterated.

Yet the data shows that non-realty SOEs are increasing their investments in the realty sector.

Who is responsible?

The SOEs that have flouted the instruction must be punished for doing so.

It is quite possible that interests are involved behind the scene so a disciplinary order might have no effect. It is time for the higher leadership to intervene to better regulate these SOEs and teach their officials a lesson on obeying orders.

A lack of effective supervision over the spending of SOEs' annual budgets may be another reason why they ignore the order from the central government. There used to be reports about SOEs applying for money in the name of "technological innovation", and then using the money to invest in the realty sector instead. It is the responsibility of the auditors to find these problems and solve them.

Looking deeper, the fact that many SOEs ignored the instruction highlights the necessity of advancing SOE reform. SOEs are supposed to support the national economy and help prevent any crisis, but the fact is many of them take illicit profits with their monopolies. They do not care about the national economy; they have become vested interests now and all they care about is their own profits.

Only thorough reform of SOEs can end this.