CHINA issued details yesterday on plans to reform State-owned enterprises (SOEs), including the introduction of “mixed ownership” by bringing in private investment, and said it expected decisive results by 2020.

    The guidelines, jointly issued by the Communist Party’s Central Committee and the State Council, China’s Cabinet, will help improve corporate governance and asset management, the official Xinhua News Agency said.

    It will also help prevent the loss of State assets.

    The government will not use forceful means to push the “mixed ownership,” nor will it set a timetable, giving each firm the go-ahead only when conditions are right, it said.

    State firms will be allowed to bring in “various investors” to help diversify their share ownership, and more State firms will be encouraged to restructure to pave the way for stock listings, Xinhua said.

    Non-State firms will be encouraged to join the process through various means, including buying stakes and convertible bonds from or conducting share rights swaps with SOEs. SOEs will also be allowed to experiment with selling shares to their employees.

    SOE boards of directors will have greater decision-making powers, managers will be more tightly supervised, and government intervention will be forbidden under the new guidelines.

    SOEs will be split into commercial and public welfare-related businesses.

    For companies operating in strategic sectors and are seen as important for national security, the government must remain a majority shareholder, it said. Non-competitive companies should be closed or allowed to go bankrupt.

    The State industrial economy is dominated by 111 government-owned conglomerates, which account for about 60 percent of SOE revenue and are overseen by the State-owned Assets Supervision and Administration Commission.(Xinhua)