context: The role of SOEs (state-owned enterprises) becomes more important under Xi, despite his earlier mantra of 'giving the market a decisive role in resource allocation'. The goal of market-oriented SOE reforms is never to raise the role of market actors, but to use the market framing to reshuffle and strengthen SOEs.
Hao Peng 郝鹏 SASAC (State-owned Assets Supervision and Administration Commission) chairman published an op-ed in Study Times, the CCP mouthpiece. SOEs, according to Hao, are the critical material and political foundation of CCP-governed socialist society with Chinese characteristics. In accordance with secretary-general Xi Jinping's strategic view, Hao fleshed out priorities of SOE work in the 14th five-year plan, including
- strengthening state-owned capital and SOEs in terms of quality and size
- building world-class SOEs to foster leading companies in industries, innovation, and specialised supporting sectors
SOE high-quality development should follow Xi's new development philosophy, says Hao, specifically
- enhancing quality and efficiency through the new performance metric consisting of total profit rate, R&D investment intensity, aggregate productivity, and debt-to-asset ratio; modern management systems and product and service quality must be emphasised
- improving weak links by guiding SOEs to invest in critical economic, technological, defence, and security sectors
- deepening reform in labour, human relations, and distribution systems
- preventing risks from investment and financial debt, as well as foreign-related risks
SOEs must be at the forefront of the dual circulation development model, adds Hao, becoming the
- 'national team' in technological innovation
- commander of modern industrial chains
- main driving force of internal circulation
- platoon leader in going global