The central SOE investment and overseas investment management measures, released by SASAC on 18 January 2017, explore using negative lists to categorise investments into 'prohibited' and 'under special supervision', notes Huang Danhua 黄丹华 SASAC deputy director.
The new supervision measures, adds Huang, emphasise
- rule of law
- setting out the boundaries in investment responsibility between SASAC and central SOEs more clearly
- thoroughness
- setting up an investment management system
- improving information sharing
- implementing a negative list system
- coordinating investment activities and supervision
- supervision across entire process
- pre-investment: central SOEs are required to submit annual investment plans to SASAC
- during investment: SASAC to carry out inspections
- post-investment: both SASAC and central SOEs should submit evaluations
The measures apply stricter rules to central SOEs' overseas investments, requiring firms to focus on their main business activities and reducing risk, notes China News, highlighting SASAC
- encouraging third-party investment participation to dilute risks
- requiring risk evaluations by third-party consultant agencies for key investment projects
- encouraging firms to make full use of export and credit insurance and commercial insurance
Total central SOE overseas investments have hit C¥5 tn across 150 countries and regions, requiring stricter supervision to avoid the loss of state assets, adds Huang.