General

In the recent Fortune 500 list published by Fortune magazine, there are 95 state-owned enterprises in China on the list, accounting for 85% of China's listed companies. Among the top 10 of the Fortune Global 500, 8 of China are central enterprises.

"China Business News" reporter learned that some central enterprises have begun to formulate plans as early as 2019 to benchmark world-class enterprises. At the same time, the "three-year action" of state-owned enterprise reform has pushed enterprises forward to this goal.

"The key to speeding up the building of a world-class enterprise lies in reform, and the top priority for reform is to resolutely implement the "three-year action" plan for the reform of state-owned enterprises," said an official from the State-owned Assets Supervision and Administration Commission of the State Council.

Increased proportion of state-owned enterprises

According to data released by the State-owned Assets Supervision and Administration Commission of the State Council, in the recently announced 2021 Fortune Global 500 list, a total of 49 central enterprises and subsidiaries supervised by the State-owned Assets Supervision and Administration Commission of the State Council were shortlisted, one more than last year; A total of 33 state-owned enterprises were shortlisted, one more than last year. Among the top five companies, Chinese companies account for three, namely: State Grid Corporation of China, ranked second, China National Petroleum Corporation, ranked fourth, and China Petrochemical Corporation, ranked fifth.

State-owned enterprise reform expert Li Jin analyzed that the State Grid has risen to second place. There is no doubt that state-owned enterprises are still the backbone of China's national strength.

“The heavy weight of state-owned enterprises reflects the distinctive characteristics of China’s public ownership as the mainstay.” Li Jin said, “In the process of global economic reshuffle, China’s listed companies, especially state-owned enterprises, have continued to increase and their rankings have generally risen. Growth momentum. This shows that Chinese state-owned enterprises are still maintaining a good momentum of triumphant growth in terms of becoming'big.' China is among the top ten, except for China's Ping An and Hon Hai Precision, the rest are all state-owned enterprises."

According to data from the State-owned Assets Supervision and Administration Commission, the total number of state-owned enterprises on the Fortune Global 500 list in 2021 is 95, an increase of 3 from the previous year. Nine state-owned enterprises including China State Shipbuilding Corporation, Weichai Power, Guangzhou Pharmaceutical Group, China Resources Land and Yunnan Investment Holding Group made the list for the first time.

Complementary to the reform of state-owned enterprises

In fact, as early as 2019, Wang Yilin, the former chairman of PetroChina, told reporters that he was doing work related to benchmarking world-class companies.

This time point coincides with the "Three-year Action Plan for State-owned Enterprise Reform (2020-2022)".

The aforementioned person from the State-owned Assets Supervision and Administration Commission of the State Council told reporters that for central enterprises, reform is the key to becoming stronger, better, bigger, and faster to build world-class enterprises, and the top priority of reform is to resolutely implement the "three-year action" plan for state-owned enterprise reform. .

When referring to a typical case of state-owned enterprise reform, the person said: “In the future, we must encourage and support bold reforms and innovations at the grassroots level, and actively explore more replicable and popularized experience models, especially the “Double Hundred Enterprises” and “Science Reform Demonstration Enterprises”. Standardize first-class management and enhance benchmarking enterprises' reform experience, and give full play to the typical exemplary role."

In 2020, the State-owned Assets Supervision and Administration Commission of the People's Republic of China announced the "Notice on Carrying out Actions to Improve the Benchmarking of World-Class Management." It is clear that by 2022, the management concepts and management culture of key state-owned enterprises will be more advanced, management systems and management processes will be more complete, management methods and management methods will be more effective, management foundations will continue to be consolidated, innovation results will continue to emerge, and the basic system will be complete, scientific and standardized. Running an efficient modern state-owned enterprise management system with Chinese characteristics, the overall management capability of the enterprise has been significantly enhanced, and the management of some key state-owned enterprises has reached or approached the world-class level.

Parallel to this, the "Three-Year Action" for the reform of state-owned enterprises has also been fruitful.

According to data from the State-owned Assets Supervision and Administration Commission of the State Council, the in-depth implementation of the "Three-Year Action" for the reform of state-owned enterprises has improved the quality and efficiency of enterprise development. In the first half of this year, state-owned system-supervised enterprises achieved operating income of 33.6 trillion yuan, a year-on-year increase of 29.4%; net profit was 1.8 trillion yuan, a year-on-year increase of 129.5%.

Seize the minimal reform window period

It is understood that the Fortune Global 500 is the most well-known list for measuring large companies. It is published annually by Fortune magazine, with sales revenue as the main criterion. In addition, profit, assets, shareholders' equity, and the number of employees are used as reference indicators.

Regarding the dazzling performance of Chinese companies on the Fortune 500 list, Fortune believes that China has effectively contained the new crown pneumonia epidemic, allowing companies to quickly resume and expand production, and the increase in foreign orders from Chinese companies has led to the expansion of foreign trade. China is the only major economy in the world to achieve positive trade growth in 2020, and the scale of imports and exports for the whole year hit a record high. The growth of international trade has promoted the recovery and stable development of Chinese companies' operations.

A period of good corporate efficiency is also extremely beneficial to the advancement of reforms.

The aforementioned person from the State-owned Assets Supervision and Administration Commission of the State Council said that the current environment for deepening the reform of state-owned enterprises is extremely favorable, and all parties agree with the status of state-owned enterprises. They highly appreciate the role of state-owned enterprises, especially their outstanding contributions in the fight against the epidemic, and strongly support the reform and development of state-owned enterprises; It is a window period with less pressure to stabilize growth, which provides a rare opportunity for deepening reform and breaking through key and difficult issues. It can be said that the opportunity is indispensable.

Ansteel Group, which was shortlisted in the Fortune Global 500 list, has achieved tangible results in the process of advancing the reform of state-owned enterprises.

A source from Ansteel Group disclosed: “Through the reform, 24.4% of the approval items have been streamlined, with a maximum of 45 items and a minimum of 31 items for sub-companies."

He cited, for example, that Chaoyang Steel, which has suffered losses for 6 consecutive years, is on the verge of bankruptcy, and is recognized as a "zombie company" by the State-owned Assets Supervision and Administration Commission of the State Council. The mechanism of the state-owned iron and steel enterprise model has realized the transformation from a "difficult enterprise" to an "industry leader".

"The'Three-Year Action' time is passing quickly. Once you miss this round of reform, you will inevitably have to make up lessons in the future, and you will be passive step by step. In reforming the'Three-Year Action', we must have a strong sense of urgency and carry forward the nails. The spirit will be accelerated and strengthened, and the reform work will be tightened and more practical." The aforementioned person from the State-owned Assets Supervision and Administration Commission of the State Council said.