More Chinese state-owned companies might be spun off as private entities to help improve economic growth, but Beijing will keep control of major industries, a Chinese State Council official said yesterday.
Regulators are working on plans to overhaul ownership following the Chinese Communist Party’s pledge last month to increase competition in state-dominated industries, said Huang Shuhe (黃淑和), vice chairman of the council’s State-Owned Assets Supervision and Administration Commission, which controls the biggest government companies.
Economists say that Beijing must curb the dominance of state companies that control swathes of the economy, from banking to oil and steel production, or risk seeing China’s growth rate plunge.
The development blueprint issued last month pledges to open more industries to competition, although it said state ownership will remain the core of the Chinese economy.
Huang gave no details of which companies or industries might be affected.
The 117 companies that are controlled by the State Council, or Cabinet, range from areas regarded by many countries as strategic, such as oil or telecommunications, to a travel agency and a food processor.
They include oil giant PetroChina Ltd (中國石油天然氣), phone carrier China Mobile Ltd (中國移動) and four of the world’s biggest banks.
“State-owned industries that don’t require state ownership can allow more ‘social capital,’” Huang said at a news conference, using the party’s euphemism for private investment. “State ownership could be reduced or entirely withdrawn.”
Huang said that would apply only to some companies, adding that those deemed “vital to national security” — a segment that the government previously said includes a wide range of companies — would remain entirely state-owned.
Growth in the world’s second-largest economy fell in the second quarter of this year to a two-decade low of 7.5 percent.
It rebounded to 7.8 percent in the following quarter, but analysts say that was due to higher government spending and growth might fade this quarter or early next year.