Trial now

Pullback Considered Corrective


Holding Above Recent Lows


BLOCK, Large 3Y Midcurve Put Condor

--31 SOEs Included In 3rd Round Of Reform Drive
     BEIJING (MNI) - China's National Development and Reform Commission on
Wednesday signaled that it is speeding up reform of the state-owned enterprise
sector, confirming that 31 SOEs are to be included in the third round of the
mixed-ownership reform program for the sector.
     The total of 31 SOEs involved in the third stage is an expansion of the
nine that were involved in the first stage and the 10 that were involved in the
     The NDRC announcement followed a recent wave of vows by various government
officials that SOE reform would be speeded up. At the 19th Communist Party
Congress in October, President Xi Jinping stressed the importance of SOE reform
and transforming the enterprises into mixed-ownership entities in order to
nurture "top-class international companies."
     On Tuesday, the State-owned Assets Supervision and Administration
Commission of the State Council published an analysis by SASAC director Xiao
Yaqing of Xi's report. In it, Xiao stressed the significance of SOE reform and
pledged to advance mixed-ownership reform of SOEs in "key fields," improve
initial public offerings of SOEs, support private investment in SOEs through
various means, and encourage private investors to participate in the
restructuring and reorganization of SOEs.
     As of the end of 2016, total assets of SOEs had reached CNY154.9 trillion,
but their efficiency had deteriorated and their profit rates were low, due in
large part to poor corporate governance and low workforce productivity. In
response, the Chinese government has been working to reform the shareholding
structures of SOEs and has asked them to spin off non-core assets and
     This year has seen SOE reform increasingly expanded to the capital market.
The state-owned telecommunications operator China Unicom, for example, in
October finalized a deal to sell off a 35% share stake in its Shanghai unit to
private investors including Baidu, Tencent, Alibaba and
     Local governments have also stepped up reforms of local SOEs, with Beijing
earlier this month issuing a document on deepening reform of local SOEs that
provide "cultural products" such as films and media content. Beijing also set a
goal of having at least one subsidiary company under every such SOE listed on
the stock market.
     Shenzhen city also rolled out a scheme at the end of October to accomplish
mixed-ownership reform of local SOEs in "competitive sectors" by 2019.
     As shares of around 50 local SOEs are suspended on the Shanghai and
Shenzhen stock market because of reorganizations of their important assets or
"other important events," more SOE reform measures are expected, including from
the Central Economic Work Conference, an annual gathering that occurs at the end
of the year.
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
[TOPICS: M$A$$$,M$Q$$$,MT$$$$,MGQ$$$]