City strives to build highland for SOE reform

Government officials and representatives from enterprises attend a press conference on State-owned enterprises held at Shenzhen Civic Center in Futian District yesterday. Shenzhen Government Online

Through consistent and in-depth structural reform and management innovation, the State-owned economy of Shenzhen has grown by 28.7 percent annually on average and its total assets have soared to 24,600 times from 1979 to 2019, according to a press conference held by the city government yesterday.

In 2019, the total assets, net assets, operating income, total profits, net profits and tax payment of municipally administered State-owned enterprises (SOEs) all reached historical highs.

Among the 37 provincial-level State-assets regulators in China, the total assets of Shenzhen’s SOEs ranked fourth, while the indicators of total profits, net profits and the ratio of profits to cost ranked second nationwide.

The Shenzhen State-owned Assets Supervision and Administration Commission oversees 30 State-owned enterprises and 30 listed companies, who employ a total of 245,000 people, according to official data.

“At present, none of the enterprises under the direct management of the commission is in deficit, and there are no ‘zombie enterprises’ in the whole system,” said Yu Gang, head of the commission.

By the end of June 2020, the total assets of Shenzhen’s SOEs had reached 3.82 trillion yuan (US$550 billion), and the total liabilities were about 65 percent, according to Yu.

Shenzhen’s SOEs had yielded 303.1 billion yuan of revenue, 47.5 billion yuan of total profits and 35.1 billion yuan of net profits in the first half of the year, which is roughly flat compared with the same period last year.

“Without a strong economic foundation, we cannot undertake political and social responsibilities. Enterprises must have quantitative goals. By 2022, the total assets of Shenzhen’s SOEs are expected to reach 4.5 trillion yuan, and the debt ratio must be controlled at about 65 percent,” Yu said.

As one of the first two cities in China to pilot comprehensive SOE reform, Shenzhen is sparing no effort to put 39 reform measures in nine aspects and 106 specific tasks into place, and has achieved phased results.

In the newly released list of Fortune Global 500, Shenzhen Investment Holdings Co. Ltd. entered the list for the first time, ranking 442nd and becoming one of the eight Shenzhen-based companies on the list.

The rapid growth of business performance is inextricably related to the continuous deepening of SOE reform and transformation of SOEs in Shenzhen.

In accordance with the city government’s decisions and arrangements, Shenzhen’s SOEs have focused on supporting the development of private enterprises and serving high-tech industries over the past two years, while shouldering more responsibilities to ensure the smooth running of the city.