BEIJING, July 31 (Xinhua) -- As economic activities gradually normalize in China, state-owned enterprises (SOEs), the backbone of China's economy, have registered a quick recovery and made great strides in the ongoing reform, unleashing dynamic momentum for high-quality development.
The latest official data showed that revenues of central SOEs climbed by 0.6 percent year on year to 2.9 trillion yuan (about 414.9 billion U.S. dollars) in June, while net profits hit 166.48 billion yuan, up by 5 percent, recovering from a COVID-19 downturn.
"Since the beginning of the second quarter, performances of central SOEs have improved significantly, and the decline in their revenues and profits have continued to narrow," said Peng Huagang, spokesperson for the State-owned Assets Supervision and Administration Commission of the State Council (SASAC).
Moreover, by implementing the national policies of cutting prices and fees in the first half of the year (H1), the central enterprises helped ease operational costs for the virus-hit economy by over 120 billion yuan, according to the SASAC.
As some industries faced great challenges in H1, it has become more pressing to enhance quality and efficiency, which further highlights the importance of the SOE reforms, said Zhou Lisha, a researcher at a research institute of the SASAC.
In late June, a three-year action plan for SOE reform, expected to take the country's reform in state-owned assets and firms to a new level, was reviewed and approved at the 14th meeting of the central committee for deepening overall reform.
The three-year action plan is a key juncture linking past and future, and an updated version of the previous SOE reforms, securing the economic transformation and the adjustments of the industrial structure, said Zhu Changming, who is in charge of the SOE mixed-ownership reform center at Sunshine Law Firm.
The action plan further clarified the goal, timeline and roadmap of the SOE reforms, and will expedite the implementation of the reforms, said Li Jin, head of the China Enterprise Research Institute. He noted that mixed-ownership reform is a critical and fundamental reform among all the stipulations.
In June, east China's Shandong Province unveiled 40 projects with mixed-ownership reform. In the northeastern province of Heilongjiang, over 100 enterprises have completed mixed-ownership reform since 2016, with improved operating performances after reform.
According to the SASAC, mixed-ownership reform will be launched in more SOEs with more industries involved, while state-owned capital will be encouraged to invest in the private sector, in a bid to push forward comprehensive reform in these enterprises.
Meanwhile, China's Nasdaq-style sci-tech innovation board, also known as the STAR market, provided new opportunities for SOEs in terms of financing channels as well as improvement in management and incentive mechanisms. With the promotion and support from the SASAC, many central SOEs have been listed on the STAR market.
The SOEs, on the other hand, function like a catalyst as the country speeds up reform in the capital market. In the first half of 2020, SOEs listed on the Shenzhen Stock Exchange completed 10 restructuring cases totaling more than 217.49 billion yuan, and 12 refinancing cases worth 22.32 billion yuan, official data showed.
More professional managers are expected to be signed on by SOEs, while equity incentives and employee stock ownership are much more common in listed central SOEs.
In the second half of the year, the SASAC will further promote the professional integration of the central SOEs, especially those related to grain reserves, vegetable oils and fats processing and marine engineering, said Peng.
Through deepening reform for high-quality development, the SOEs will provide strong support to the stable operation of the Chinese economy, said Zhu.