BEIJING • China has unveiled long-awaited guidelines on the reform of its inefficient state-owned enterprise (SOE) sector, including plans for share sales and mergers.
The concept of "mixed ownership" will be introduced and private investment will be brought in, reported Xinhua, the official news agency, yesterday.
Reforming China's sprawling and inefficient state sector is seen as one of the country's most pressing tasks, as growth slows in the world's second-largest economy.
The guidelines, which were jointly issued by the Communist Party's Central Committee and the State Council, China's Cabinet, will see state firms being allowed to bring in "various investors" to help diversify their share ownership.
More state firms will be encouraged to restructure to pave the way for stock listings, Xinhua said.
Private investors will be encouraged to buy stakes in state firms, buy convertible bonds issued by state firms or swap shares with state firms.
A press conference is scheduled for today to provide more details.
The government will not use forceful means to push "mixed ownership", nor will it set a timetable, giving each firm the go-ahead only when conditions are mature, the guidelines stated.
Private investors will be encouraged to buy stakes in state firms, buy convertible bonds issued by state firms or swap shares with state firms, according to the guidelines, and steps will be taken to curb corruption during reforms.
The plans come at a time when China's slowing economy and recent stock market turmoil have investors worried.
ANZ analysts noted this round of SOE reform could be a "game- changer" in China's economic development, the Financial Times reported, although the analysts also said the reform will be a gradual process and that it is "unlikely that the government will relinquish its tight control and involvement over the SOEs, especially those in strategically important sectors".
Chinese private companies are usually seen as more efficient and innovative than state-owned firms.
The government aims to "cultivate a large number of state-owned backbone enterprises with innovation capability and international competitiveness", Xinhua said, indicating that the reforms will not amount to full-scale privatisation.
The transformation is expected to be complete by 2020.
"The guidelines suggest that by 2020, the goals in all the main reform areas should be accomplished, constituting a system that is more suitable to the nation's socialist-market economy," said Xinhua.
The guidelines come nearly two years after President Xi Jinping called for market forces to play a decisive role in better allocation of resources. China's state enterprises are dominated by 111 central government-owned conglomerates, which account for about 60 per cent of SOE revenue and are overseen by the State-owned Assets Supervision and Administration Commission.