The State-owned enterprises (SOEs) of China have made significant contributions to the economic and social development, scientific and technological progress, as well as the improvement of people’s well-being in China. The experience in reform and development of China’s SOEs is a valuable reference for the SOEs in Vietnam.
THE SINICIZATION OF MODERNIZATION
The Sinicization of modernization has laid a solid foundation for the SOE reform to be carried out in a stable and long-term manner.
The Sinicization of modernization is a socialist modernization led by the Communist Party of China (CPC). It not only has the common characteristics of modernization in all countries, but also has Chinese characteristics based on the country’s actual conditions.
The five basic characteristics of the Sinicization of modernization are: “Modernization with a huge population”, “Modernization that makes the whole people rich”, “Modernization that harmonizes material and spiritual civilization”, “Modernization for people to live in harmony with nature” and “Modernization that follows the path of peaceful development”.
On the road ahead, China will implement five important principles of the Sinicization of modernization: “Adhering to and strengthening the Party’s overall leadership”, “Adhering to the path of socialism with Chinese characteristics”, “Adhering to the people-centered development concept”, “Adhering to deepening reform and opening up” and “Adhering to the spirit of struggle”.
According to the scientific methodology, promoting the Sinicization of modernization is a systematic project that requires overall planning, systematic planning and overall promotion, and proper handling of the six important relationships: “Between the superstructure design and practical exploration”, “Between strategy and policy”, “Between integrity and innovation”, “Between efficiency and fairness”, “Between vitality and order” and “Between self-reliance and opening up”.
The world outlook, values, historical views, views of civilization, views of democracy, views of ecology, and other great practices in the process of the Sinicization of modernization are important innovations in the theory and practice of world modernization. The Sinicization of modernization is a learning experience for many developing countries to modernize independently and gives them a new choice.
THREE CHANGES IN REFORM AND DEVELOPMENT
The reform of China’s SOEs has undergone three major changes:
Firstly, we will continue to deepen the reform of the SOE system, build and improve a modern SOE system with Chinese characteristics.
Secondly, we will continue to deepen the reform of the state-owned asset management and supervision system, and establish the independent market主体status of enterprises.
Thirdly, we will continue to deepen the reform of the enterprise operation mechanism, and stimulate the enterprise’s internal vitality and motivation.
As a result, China’s SOEs have achieved remarkable achievements in the new era. They are: “A fundamental strengthening”, “Two historical solutions”, and “Three systematic reshaping” with the following specific results:
“A fundamental strengthening” is that the Party’s leadership and the work of building the Party have been fundamentally strengthened to focus on effectively promoting the link between the responsibility of building the Party and the business responsibility of enterprises, and promoting the deep integration of the work of building the Party with production and operation.
“Two historical solutions” are the issues of reforming the shareholding system of SOEs and the issue of divesting enterprises of social and public welfare functions have been resolved historically. Accordingly, China has basically completed the overall restructuring of 14,700 central SOEs and 150,400 local SOEs, affirming the status of SOEs as independent market entities; the reform involving 15 million families of workers and 20.27 million retirees has been completed, and many SOEs have completely shed their historical burdens and can participate in market competition fairly.
“Three systematic reshaping” include:
Firstly, systematically reshape the modern enterprise management structure of SOEs to: (i) unify and strengthen the Party’s leadership and improve enterprise management; (ii) the Party organization, the board of directors, and the board of supervisors of the enterprise shall all perform their duties and responsibilities in accordance with the law, transparently and coordinated.
Secondly, systematically reshape the state capital allocation structure to promote the successful implementation of a series of major strategic restructuring, industry integration in accordance with the principle of marketization. Over the past three years, 7 central SOEs in 4 groups and 347 local SOEs in 116 groups have carried out strategic restructuring. Work such as “cleaning up”, divesting from inefficient business sectors and industries has been basically completed.
Thirdly, reshape the state-owned asset management and supervision system in a systematic manner to: fully implement the responsibility of SOE investors, the responsibility for managing and supervising state-owned assets, and the responsibility for Party building in SOEs; enhance the advantages of professional, systematic, and legal supervision and strengthen cooperation with state-owned asset supervision agencies at the central, provincial, and municipal levels.
The continuous deepening of SOE reform has strongly promoted the development of high-quality state-owned assets and SOEs. As a result, in the ten years of the new era, the state-owned total assets have tripled, reaching 28.9 trillion yuan, with an average annual revenue growth rate of 5.9%, an average annual total profit growth rate of 7.3%, and an average annual total assets growth rate of 10%.
SIX FOCUSED REFORM AREAS
In the new stage, on the new journey, China strives to promote the reform of SOEs to continue to develop in depth. China has formulated a series of new action plans to deepen the reform of SOEs in line with the changing situation, focusing on enhancing core competitiveness and strengthening core functions.
Accordingly, China is implementing a series of new actions to serve the national strategy, persisting and striving to help SOEs develop stronger, better and bigger, and effectively playing the role of supporting the strategy of the state-owned economy. The focus is to continue to strengthen comprehensive reforms around six aspects.
Firstly, strengthen the leading role of the industry and promote the construction of a modern industrial system, which is: focus on creating a new development pattern, adhere to the parallel development of strategic emerging industries and traditional industries, plan better the domestic and international circulations, and promote SOEs to achieve high-quality development goals.
Secondly, accelerate the scientific and technological innovation of enterprises, and strive to play an important role in self-reliance in technology. In order to contribute to building a strong country in science and technology, scientific and technological innovation should be placed in an important position, the position of the enterprise as the subject of innovation should be highlighted, the national strategic scientific and technological strength should be trained, and more valuable scientific and technological innovations should be made “national weapons”.
Thirdly, improve the efficiency of state capital allocation, strive to promote strategic restructuring and professional integration. “Taking enterprises as the main body and marketization as the means” to highlight the main business operations, focus on industry, focus on developing strength and specialization, promote the concentration and restructuring of SOEs, advance and withdraw in an orderly manner, improve quality and efficiency, promote the rational flow of state capital and optimize the allocation of capital…
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(*) The author is a member of the Board of Directors, Head of Finance – Strategy, Vietnam Posts and Telecommunications Group (VNPT).
https://postenp.phaha.vn/chi-tiet-toa-soan/tap-chi-kinh-te-viet-nam
