China details regulation on central SOEs' asset management
China's state asset regulator on Monday released a document aimed at avoiding state asset losses with an accountability mechanism to punish illegal business operations and investments by centrally administered state-owned enterprises (SOE).
The document specified the scope, standard and treatment procedures in cases of illegal management and investment of state assets, providing a basic framework for keeping track of such offenses, according to the State-owned Assets Supervision and Administration Commission (SASAC).
Through the move, the regulator hoped to push state firms to foster a clearer and more effective operation system to avoid state asset losses.
The document detailed 72 responsibility-tracking scenarios in 11 areas, including risk control, fixed asset investment, mergers, restructuring and overseas investment.
It also categorized the cases into three groups regarding the losses incurred: losses of less than 5 million yuan (734,214 U.S. dollars), losses between 5 million yuan and 50 million yuan, and those above 50 million yuan.
Based on the losses and the nature of the illegal practices, the SASAC will hold those found responsible accountable for their actions.
As central authorities have prioritized curbing financial risks, SASAC has put the capital structure, financing leverage, investment and risk of central SOEs under greater scrutiny in recent years.
China currently has 96 centrally administered SOEs, down from 117 five years ago, as the central government has been restructuring central SOEs to improve their efficiency and competitiveness.
Earlier official data showed combined profits of China's central SOEs totaled 887.79 billion yuan in the first half of 2018, up 23 percent from a year earlier.
Their total revenues stood at 13.7 trillion yuan in H1, up 10.1 percent year on year.