Xi Jinping Calls for Bigger, Stronger SOEs

Xinhua: Chinese leaders emphasize efforts to deepen SOE reform

The Chinese headline is more forceful. Xi tells SOEs to go big, go strong, be superior.

Sina: 习近平：理直气壮做强做优做大国有企业

　Xi Jinping pointed out that to unswervingly deepen reform of state-owned enterprises, focus on innovative institutional mechanisms to accelerate the establishment of modern enterprise system, state-owned enterprises to play all kinds of talents enthusiasm, initiative and creativity, to stimulate the vitality of various elements. In accordance with innovation, coordination, requires green, open, shared development concept, promote structural adjustment, innovation and development, layout optimization, state-owned enterprises play the leading role in the supply-side structural reforms.

　　Xi also emphasized the strengthening and improving Party leadership over state enterprises and prevent the loss of state assets, and the requirement as soon as new achievements in the state-owned enterprise reform key areas and key links.

　　Premier Li Keqiang given instructions stated that state-owned enterprises should actively promote the establishment of modern enterprise system and improve the corporate governance structure, to follow the laws of the market, fitness and health quality and efficiency, eliminate backward production capacity surplus, in order to promote supply-side structural reforms.

The government is trying to boost private investment, but has to send out teams to enforce reform efforts. A real estate bubble driven in part by SOE developers is in full bloom. Supply side reforms stagnated as steel mills increased production in the face of rising prices. In order for China to reform, the state sector should shrink because the key industries of the future are not dominated by SOEs. No doubt the message is for SOEs to be great companies, but until they lose explicit state support, let alone implicit, most will fail to improve and they will continue to delay reforms and slow the private economy.