China Legalizes Management of State-owned Assets

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Last updated at: (Beijing Time) Tuesday, June 10, 2003

China Legalizes Management of State-owned Assets

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The promulgation of the Statute for the Supervision and Management of Corporate State-owned Assets for trial implementation marks China has begun to legalize the management of its state-owned assets, Chinese economists said Monday.

However, they say, there is still a long way to go to achieve effective supervision and management of state-owned assets.

Zhang Wenkui, researcher with the Development and Research Center under the State Council, said the statute gave the central ownership agency the right to guide and supervise ownership agencies at lower levels, but had not clarified the content and method for guidance and supervision.

Experts' concerns also cover the definition of various kinds of state-owned assets and shortage of expertise. They agree that the current statute is rudimentary and transitional and is to be further clarified in practice.

Li Baomin, deputy director of the Institute of Economy under the State Development and Reform Commission, said the definition of state-owned assets in the statute was hard to apply to enterprises with investment loans from commercial banks, and the statute failed to define the responsibility of the core operators of state-owned assets like state-held companies and investment companies.

Liu Pengfei, a senior research manager with the Horizon Research Group, mentioned the statute neglects measures covering the buying of state shares.

The statute also failed to stipulate how to set the price of state-owned assets, and the legal responsibilities of the ownership agency under the State Council, said Zhang Wenkui.

The statute is China's first legal document governing the management of state-owned assets, and there is much room for improvement, experts say.

According to Zhang, government departments concerned are making relevant rules and regulations to lay a solid foundation for the management of state-owned assets according to market law.

Experts are expecting an early promulgation of the law of state-owned assets management, drafted on the basis of the statute.

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