SOE mixed ownership reform expected to accelerate

Employees of a power supply company in Weining county, Guizhou province, check power transmission facilities. [Photo/Xinhua]

China is screening a third batch of centrally administered State-owned enterprises (SOEs) for mixed ownership reform, officials of the country's economic planner said.

Civil aviation, telecommunication and military will be key sectors to press ahead ownership reform, China Securities Journal reported on Tuesday.

About 18 SOEs, including China Eastern Airlines, China Unicom and Air China, have submitted their plan to introduce private shareholders among the 19 shortlisted. National Development and Reform Commission (NDRC) green-lighted the first batch of nine proposals.

"As the ownership pilot reform expands in scale and further deepens in next step, it will serve as a breakthrough point to overhaul SOEs," NDRC spokesman Yang Pengcheng said.

The third batch will likely include oil and gas giants once the industry's reform plan is officially launched, according to the planner. Each ownership reform model has its own characteristics

China Unicom announced last month that its Shanghai-listed unit, China United Network Communications Ltd, would be used as the platform for mixed ownership reform, instead of its Hong Kong-listed unit.

Air China said its State-owned parent, China National Aviation Holding Company, received approval from the NDRC to move forward with mixed ownership reform of its air freight logistics business.

The move comes as China vows to accelerate SOE ownership reform and strengthen the micro foundation of market economy, according to a statement released by the NDRC last week after the national work conference on economic system reform.

Also known as partial privatization, the mixed ownership reform would spur an increasing number of restructuring, initial public offerings, employee share-ownership and introduction of strategic investors, Deloitte noted in a report.

Local SOE reforms are expected to speed up too in regions, including Shandong, Heilongjiang, Hainan and Shanxi provinces, and Shanghai, according to the newspaper.