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Strong Vigor is Needed to Foster China’s World Class Enterprises (No.40, 2019)


By Yuan Dongming & Yuan Luyao, Research Team on “Study on World-Class Enterprises with Global Competitiveness”, Enterprise Research Institute, DRC

Research Report, No.40, 2019 (Total 5540) 2019-3-26

Abstract: A batch of China’s state-owned enterprises have the basic conditions to be listed into the world-class enterprises, but still lack strength despite their big business size, specifically manifested in their inadequate efficiency, quality and competitiveness. The fundamental problem behind these phenomena is their insufficient corporate vigor and marketisation mechanism. To foster a batch of large state-owned commercial enterprises into world-class enterprises with global competitiveness, it is necessary to instill the enterprises with vigor, and systematically deepen the reform of state-owned assets . First, the state-owned asset supervision needs to shift its focus from management of the enterprise to management of the capital, so as to empower the enterprises with full operational autonomy. Second, reform of the investment and operation companies for state-owned assets needs to be deepened to help remove the restraints on corporate administration. Third, the mixed-ownership reform among the state-owned enterprises in the commercial field needs to be advanced so as to boost the transformation of their overall corporate operation mechanism. Fourth, the internal incentive reform needs to be strengthened within the enterprises. Fifth, the role of state-owned entrepreneurs needs to be fully leveraged.

Key words: world-class, state-owned enterprises, instilling vigor