Shanghai is considered a relatively “advanced” city in terms of reform of
its state-owned enterprises
(SOEs), in fact it is relatively backward. During the 1990s Shanghai basically relied upon foreign
investment to create new competitive industries and to spur economic
growth. Shanghai’s SOEs were
hardly touched by the reformist storm that swept many other provinces.
seems that things are now changing.
The change was announced at a meeting of the Shanghai Municipal State
Owned Asset Commission (上海市国有资产管理委员会)
on March 23 of this year. At that
a meeting Party Secretary Chen Liangyu 陈良宇 admitted that when the first
state owned holding company was established in Shanghai in 1993 “we
underestimated the difficulty of reforming SOEs.”
recalled that in 1993 19 industrial bureaus工业管理局under the Shanghai government
were reorganized into over 50 (later consolidated into 39) holding companies 控股公司 and
enterprise groups企业集团. This reform was
considered important to the extent that it created an a clear “owner” and
capital provider 出资人. However, Chen noted,
since then there has often been little progress. Most the SOEs continue to operate in bureaucratic style with
poor financial results.
as Beijing launched a national initiative to reform and restructure SOEs,
Shanghai found itself far behind other localities in having a strategy for and
actually achieving results in SOE reform.
Since then, Shanghai’s Party and Government leadership have vested new
authority in the city State Assets Commission 市国资委. Most significantly, the commission is empowered to act
exclusively as the capital provider to the enterprises, exclusively represent
the ownership interests of the city, and exclusively to manage the assets and
personnel issues of the enterprises.
In the words of Mayor Han Zheng 韩政: “市国资委代表.市政府履行出资人职责，享有所有者权益，实行权益义务和只能的统一，管资产和管人管事相统一.”
plan is to implement fundamental reforms in SOEs during the next three
years. The objective of the
reforms is to transform the SOE companies into modern, competitive enterprises,
or, if this is not possible, to merge, sell, or close them. Two recent examples of reform are
the merger of Bailian 百联 and Jiajiang 锦江groups as well as the restructuring of the Shanghai Electric Group上海电气集团 .In the reform process, the policy is to accept, indeed to welcome,
foreign investment. Thus, foreign
investors, including investors from Japan, should look carefully at potential
opportunities with these companies.
SOEs contribute a significant part of Shanghai’s industrial output and employ a
large number of workers, both skilled and unskilled. In 2002 the value of Shanghai’s SOE assets totaled
some Rmb 570 billion. Operating
assets exceeded Rmb 400 billion.
SOEs were active in 85 industrial sectors, and were losing money in 23
sectors. Losses amounted to some
Rmb 50 billion (source: 21世纪经济报道2004,3,29). A newspaper
21世纪经济报道 cites a
document, 国有资产调整规划 that 55% of Shanghai’s SOEs occupy normal competitive areas. The objective to the reform is, by
2008, that 80% of SOE activity will be in the service sector, particularly
those areas that are government monopolies like security and public services,
and in key enterprises in pillar industries.
following is a list of 36 SOEs subordinate to the Shanghai State Assets
months ago the author visited上海水产(集团)总公司. This company is in
the very attractive fishery sector, and has a virtually monopoly on fishing and
fish marketing in Shanghai. I was amazed to find that this company
had not yet even restructured itself under the “company law.” It was still being run like a
traditional SOE. But the general
manager told me that he was now under pressure to truly before the process of “corporatization”
上海水产(集团)总公司 is looking forward foreign
investors. Japanese companies
seeking to enter China’s fish market should be carefully following this company’s
restructuring, and also making contacts.