The government is speeding up the drafting of a stricter auditing mechanism targeting operations and management of SOEs' overseas investments, notes Economic Information Daily. It covers
- decision-making mechanisms and implementation
- financial management systems and internal controls
- maintaining safety, controlling risks and increasing the value of state-owned assets
Auditing will be mainly through
- checking, verifying and analysing related materials and personnel in China
- on-site examination and evidence investigations, if required by auditing, international standards, or local legislation
Central SOEs Going Global have achieved progress, especially in resource allocation and international competitiveness: they have launched investments in over 150 countries and regions, with a total asset scale of C¥5 tn, especially in
- high-speed rail
- nuclear electricity
- ultra high voltage grids
The government is strengthening supervision as a result of the relatively late and backward development of central SOEs' activities compared with internationally-leading multinational corporations, notes one central SOE insider, highlighting
- lack of knowledge and experience in local culture and talent
- flawed operating systems
- negligence of risk and investment management
With State-owned Assets Supervision and Administration Commission (SASAC) publishing multiple documents in recent years, central SOEs' investment activities will be improved and better regulated, comments Li Jin 李锦 China Enterprise Research Institute chief researcher.