CAI MENG/CHINA DAILY
The 20th National Congress of the Communist Party of China and the third plenary session of the 20th CPC Central Committee have outlined the promotion of national rejuvenation through a Chinese path to modernization. In this context, the new era and new journey present both China's centrally and locally administered State-owned enterprises with new missions and responsibilities.
Boosting the growth potential of SOEs plays a crucial role in driving high-quality development and supporting the Chinese path to modernization. This is the central focus of the new round of SOE reforms.
SOEs are the cornerstone of advancing the Chinese path to modernization. Deepening SOE reforms and more effectively leveraging the role of these companies hold significant contemporary importance.
First, strengthening the role of SOEs will help China respond to unprecedented global changes and better serve the national interests.
Currently, the world is undergoing rapid and profound changes unseen in a century. SOEs are primarily distributed across many industries crucial to national security and represent an economic lifeline. They are crucial for realizing national strategic intentions and responding to changes in the external environment. Reform measures should therefore be accelerated, with the new round of SOE reforms becoming more thorough and actionable.
Through continuous reforms, the earning capability and asset structures of SOEs should be further strengthened and optimized in a market-oriented way, thus constantly improving China's institutional advantages.
Second, SOEs will play an important role in implementing the government's industrial policies. As industrial policies are crucial for driving innovation and economic transformation, governments of many countries are implementing relevant policies to foster growth of emerging industries.
Strategic emerging industries in China include sectors such as energy-saving and environmental protection, next-generation information technology, biotechnology, high-end equipment manufacturing, new energy, advanced materials and electric vehicles, said the State-owned Assets Supervision and Administration Commission of the State Council.
On the other hand, with the accelerated restructuring of global industrial competition, China's industrial transformation and upgrading face unprecedented challenges. By deepening SOE reforms and accelerating the development of a modern industrial system, they will play a critical role in dealing with difficulties and advancing the Chinese path to modernization.
Third, reinforcing the important role of SOEs, in particular central SOEs, and fortifying countercyclical planning are essential for functioning as macroeconomic stabilizers.
Currently, the Chinese economy faces considerable challenges. Given the complex domestic and international environment, SOEs should strengthen their roles from the perspective of long-term national strategic security and sustainable development, fully leverage China's institutional advantages, enhance countercyclical planning and better serve as macroeconomic stabilizers.
The new round of SOE reform is driven by the goal of advancing the national objectives, with a focus on boosting competitiveness and solidifying core functions. The reform seeks to strengthen the leadership of SOEs in six areas, including technological innovation and the modern industrial system, to support the sustained progress of the Chinese path to modernization.
First, China should improve the technological innovation mechanism to achieve high-level technological self-reliance. Technological modernization is essential to the Chinese path to modernization.
As an important part of the country's technological forces, SOEs must clearly recognize their strategic role within China's broader technological innovation framework. They should prioritize technological innovation as the "top priority", accelerate efforts to tackle core technologies and provide essential support for the development of the country's technological capabilities.
Second, it is practical for SOEs to consolidate their performance in various industries to help build a modern industrial system in China. SOEs should play an important role by actively entering new industrial sectors, accelerating the development of new quality productive forces, and fostering new growth drivers. These efforts will help China speed up the formation of an autonomous, controllable, secure, reliable and competitive modern industrial system.
New quality productive forces are characterized by advanced productivity freed from traditional economic growth modes and productivity development paths, featuring high-tech, high efficiency and high quality, and in line with the new development philosophy.
Third, the government should provide increased support in key areas to ensure national strategic security, as it forms the foundation of development. SOEs are deeply involved in industries vital to national security and the economy. It is essential to adopt a bottom-line thinking approach to balance development and security, strengthen the "defensive" line, enhance the ability to maintain "stability", and assume a protective role when needed.
Fourth, China should promote regional collaboration to reduce disparities and unlock the economic potential of inland regions. SOEs, as a crucial force in driving regional coordinated development, are key to effectively implementing the national strategy for regional coordination. They should optimize their regional strategies based on their functions and resource endowments, further supporting balanced regional development.
SOEs could play an important role in sectors such as industrial restructuring, transportation system integration and ecological improvements, contributing to higher-level regional development. By leveraging regional advantages, they should increase industrial investment tailored to local conditions, and guide SOEs to optimize regional economic layouts through incremental investments such as the establishment of new subsidiaries.
Fifth, it would be effective for SOEs to actively participate in global industrial division and cooperation to promote high-level opening-up, as openness is a hallmark of the Chinese path to modernization. SOEs must take a more proactive approach in opening-up and collaborating, deeply engaging in global industrial networks to broaden the development space for the Chinese economy.
SOEs should improve their ability to shape international standards and regulations, striving to gain greater influence in emerging sectors. They should adopt international business strategies to enhance their global presence, integrate their resources strategically and foster high-quality cooperation as Chinese companies expand their presence globally.
It is wise for SOEs to actively participate in the high-quality development of the Belt and Road Initiative and accelerate the development of the New International Land-Sea Trade Corridor.
With its operational hub based in Chongqing in Southwest China, this trade corridor connects global ports via railways, sea routes and highways through provincial-level regions such as South China's Guangxi Zhuang autonomous region and Southwest China's Yunnan province.
Sixth, SOEs are capable of playing a crucial role in driving a comprehensive green transformation of the economy, laying a strong foundation for high-quality green development. SOEs are not only important drivers of green transformation, but are also major contributors to it.
They must integrate the concept of green growth throughout their operations, accelerate green and low-carbon transformation, reduce energy consumption, improve production efficiency and contribute to achieving the harmonious coexistence of humans and nature along the Chinese path to modernization.
The writer is chief economist and head of the research institute at China Galaxy Securities Co Ltd.
The views do not necessarily reflect those of China Daily.
