China’s state owned enterprises (SOEs) hit back at their critics on Friday, noting their contributions to the world’s second largest economy and pledging to continue efforts to push forward with reform.
SOEs as they are called are a frequent target of criticism. Their monopoly of key sectors of the Chinese economy limits competition, which critics say limits the potential of China’s development.
SOE chiefs, however, say the contributions they have made to the Chinese economy over the past decade are enormous and essential.
Wang Yong is secretary of the state-owned assets supervision and administration commission.
Speaking on the sidelines of China’s national party congress, Wang says that in different phases of development, all countries have seen larger state owned enterprises compared to private enterprises and foreign enterprises and that proportion is constantly adjusting.
He says that in the 1980s the proportion of state owned companies in European countries such as England, France, Norway and even the U.S. was also very high, around 20-30 percent.
China’s SOEs currently account for about 30-40 percent of the companies in the country, but control large sectors of the Chinese economy, particularly where most of the money is made.
Over the past decade, SOEs have seen their overall assets more than triple, and they readily note that their tax contributions to the government have increased dramatically as well.
Wang did not shy away, however, from admitting that SOEs have their challenges as well such as inefficiencies and other inherent problems.
Wang says SOEs are learning from international corporations and also China’s private companies as they try to transform themselves and be subjected more to the market. He says this will lead to them being better able to compete internationally with other private enterprises, improved performance, better results and profits.
Although the SOEs are increasing their listings on domestic and overseas stock markets, their close relationship with the government remains a flashpoint for controversy.
China’s top offshore oil and gas producer, CNOOC, is currently trying to push through the country’s largest foreign takeover. Earlier this year, CNOOC began a bid to purchase Canadian oil and shale gas company Nexen.
Last week, however, the Canadian government’s review of that bid was postponed for a month.
Wang Yilin, CNOOC chairman, says he was confident the deal would still go through.
Wang says that both CNOOC’s bid to purchase Nexen is a deal between two companies that are listed on the stock exchange, and the performance of these two companies is good. He went on to say that CNOOC has been listed on the Hong Kong stock exchange for 10 years and that its market operations have all been strictly regulated.
In his final speech to the National People’s Congress on Thursday, outgoing President Hu Jintao said China should continue to consolidate and develop its public sector and deepen reform of the country’s state-owned enterprises.