Reform, Development and Party Building of State-owned Assets Supervision and Administration Authorities and SOEs in the New Era

Since the 18th National Congress of the Communist Party of China (CPC) in 2012, SASAC, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core and guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, has thoroughly studied and put into practice the guiding principles of General Secretary Xi Jinping's important statements on the reform, development and Party building of state-owned enterprises (SOEs), and resolutely acted on the decisions and deployments made by the CPC Central Committee and the State Council. On that basis, it has brought about fundamental, epoch-making and comprehensive changes in SOEs. The past decade has seen the modern corporate system with Chinese characteristics getting more mature, and seen SOEs achieving the most conspicuous progress in pursuing all-round development, improving vitality and efficiency, and optimizing layout and structure. What’s accomplished in SOE reform and development in the past ten years has made positive contributions to the historic achievements and changes that have been realized in the cause of the Party and the country in the new era.

  I. Upholding political integrity as the guiding principle, unswervingly safeguarding the establishment of both Comrade Xi Jinping’s core position on the CPC Central Committee and in the Party as a whole and the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the Two Upholds (upholding General Secretary Xi Jinping’s position as the core of the CPC Central Committee and the whole party, as well as the authority of the CPC Central Committee and its centralized, unified leadership) becoming a high degree of political consciousness  

SASAC takes Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the fundamental guideline for all work , and attaches paramount importance to the Party’s political development. It urges the Party organizations and all officials and employees of state-owned assets supervision and administration authorities and SOEs to transfer the establishment of both Comrade Xi Jinping’s core position on the CPC Central Committee and in the Party as a whole and the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era into their conscientious practice of the Two Upholds ideologically, politically and in action.

 First, strengthening theoretical study to promote and implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. We steadfastly arm our minds and guide our work with General Secretary Xi Jinping's important statements on SOE reform, development, and Party building, and make his important speech at the National Conference on Party Building in SOEs a compulsory course for the officials and employees of state-owned assets supervision and administration authorities and SOEs. We have compiled and printed the Selected Statements by Xi Jinping on Reform, Development, and Party Building of SOEs, Selected Statements by Xi Jinping on the Development of State-owned Economy, and introductory materials to make the  officials and employees of state-owned assets supervision and administration authorities and SOEs identify closely with Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era in politics and in spirit, in thought and theory, and sharpen their sense of responsibility and commitment to the Party, the country, and the people.

Second, strengthening institutional guarantee to improve the mechanisms for implementing General Secretary Xi Jinping's important directives and comments. We have comprehensively established a series of systems, such as “first subject matter”, “benchmarking”, and “follow-up and supervision”. For instance, studying and implementing General Secretary Xi Jinping's important directives and comments is the “first subject matter” for the Party Committee of SASAC and the Party committees (Party groups) of central SOEs. A closed-loop working process has been established to convey and study the instructions, make deployments for implementation, follow up and supervise how the implementation proceeds, and report results and provide feedback. The system of reporting substantial matters to the CPC Central Committee and asking for instructions has also been improved. All these efforts are aimed at making sure General Secretary Xi Jinping's important directives and comments are earnestly acted on with tangible results delivered.

Third, strengthening political supervision to guarantee the implementation of the CPC Central Committee’s decisions and deployments to the full. Bearing in mind the big picture while taking targeted actions in specific areas, SASAC focuses on carrying out the important deployments for the basing our work on the new stage of development, applying the new development philosophy, fostering the new development paradigm, and promoting high-quality development, serving major national strategies, and increasing people’s well-being, organizes full-process supervision and inspection, and carries out “Looking Back” on the implementation according to Four Criteria, namely whether there are study and discussions, implementation measures, supervision and promotion, and effect tracking. By taking these actions, SASAC makes sure the implementation of the CPC Central Committee’s major decisions and deployments is always accompanied by supervision and inspection, taking solid steps to practice the Two Upholds.

 II. Implementing the new development philosophy thoroughly, accurately, comprehensively, and solid steps being made in central SOEs’ high-quality development.

Following General Secretary Xi Jinping's directives to thoroughly, accurately and comprehensively implement the new development philosophy and promote high-quality development, SASAC takes the new development philosophy as the “baton”, gives precedence to quality and profitability, and unswervingly pursues high-quality development. The competitiveness, innovation capacity, controlling force, influence, and risk-resilience of the state-owned economy have been notably enhanced. Central SOEs play a bigger role in serving the sustained and healthy development of national economy and supporting China’s technological self-reliance on a high level.

First, following the new development philosophy in pursuit of high-quality development. SASAC has created an indicator system for high-quality development and pushed central SOEs to transform their development approach faster, so as to scale new heights in their comprehensive strengths and operating performance. From the end of 2012 to the end of 2021, the total assets of central SOEs rose from 31.4 trillion yuan to 75.6 trillion yuan, with an average annual growth of 10.3%, and the number of central SOEs listed among the Fortune Global 500 increased from 43 to 49. Between 2012 and 2021, their total profits increased from 1.3 trillion yuan to 2.4 trillion yuan, net profits from 0.9 trillion yuan to 1.8 trillion yuan, and operating revenue from 22.3 trillion yuan to 36.3 trillion yuan, with an average annual growth of 7.5%, 7.9%, and 5.5% respectively. In 2021, the profit margin of operating revenue was 6.8%, R&D investment intensity was 2.5%, and total labor productivity was 694,000 yuan per capita, up respectively by 1.8 percentage points, 0.8 percentage point, and 82% from 2012. Their debt-to-asset ratio remained well under the control line in general, continuing the decline in recent years. Also in 2021, central SOEs submitted 2.4 trillion yuan of taxation and fees, up by 35.5% from 2012. Ever since 2013, they have cumulatively submitted 18.2 trillion yuan of taxes and fees and 1.3 trillion yuan of state-owned capital gains, and allocated 1.2 trillion yuan of state-owned capital to social security fund. In the past five years, state-owned telecom enterprises have reduced fees by more than 700 billion yuan, and power generation companies have lowered the cost of power use by more than 400 billion yuan.

Second, giving more prominence to sci-tech innovation to reinforce the momentum for high-quality development. Aiming to build more pillars of the great power and forge strategic technological strengths, SASAC reshapes the working system, policy system, and talent system for sci-tech innovation in state-owned assets supervision and administration authorities and SOEs, and takes faster steps to build the important bases for tackling technological difficulties, originators of technologies, highlands of sci-tech professionals, and special zones for technological innovation. We have mobilized strong resources to overcome difficulties in key and core technologies, and formed innovation consortiums that coordinate the work of universities, scientific research institutes, and other innovators. As a result, the “stranglehold problems” in such areas as IC, 5G communication, high-speed railway, large passenger aircraft, engines, industrial machine tool, energy and power have been addressed to varying degrees. We formulated a policy package – providing all support measures possible, giving extra points in annual performance assessment, categorizing R&D expenses as profits, injecting capital, and listing payroll separately. The strong emphasis on innovation has led to central SOEs becoming considerably stronger in technological capabilities. They have accomplished a series of significant programs of world-leading level, such as manned spaceflight, lunar exploration program, BeiDou navigation, application of 5G, China-made aircraft carrier, aero-engine, and the Dongfeng missiles. They have also built a slew of landmark projects from the Hong Kong-Zhuhai-Macao Bridge, Baihetan Hydropower Station, and Deep Sea No.1 Oil and Gas  Field to HPR 1000 (Hualong Pressurized Reactor) Nuclear Power Unit and Shidaowan High-temperature Gas-cooled Reactor Nuclear Power Station demonstration project.

 Third, improving the layout and structure of state-owned economy to expand the space for high-quality development. With supply-side structural reform as the centerline and developing and strengthening the real economy as the focus of our work, SASAC guides and urges SOEs to concentrate on their core businesses and duties, accelerate the restructuring of stock assets and the optimization of incremental ones, and better play their important role in improving structure, facilitating circulation, and stabilizing growth. SASAC has strongly advanced strategic restructuring and integration, focused on strategic security, industrial pioneering, people’s livelihood, and public services. After the 18th CPC National Congress, 47 central SOEs in 26 sets have been restructured and integrated based on market principles, reducing the total number of central SOEs from 117 to 97. We have launched special programs to strip non-core businesses and non-advantageous industries and dispose inefficient or invalid assets. By the end of 2021, 93% of central SOEs’ subsidiaries were engaged in the core businesses, 97% of their investment went to such businesses, and more than 70% of their operating revenue came from important industries and key areas that have a vital bearing on state security, the lifeline of the national economy and people’s livelihood. We have put in place a long-term mechanism to reduce the number of subsidiaries. Central SOEs have cumulatively cut 19,965 legal persons, accounting for 38.3% of the total, and their management structure is flattened to five levels or less. Making great efforts to rebuild the industrial foundation and develop strategic emerging industries, central SOEs’ investments in new energy, new materials, 5G application, and other strategic emerging areas have increased at an annual rate of more than 20% over the past five years.

Fourth, highlighting green transformation and upgrade of industries to achieve better results in high-quality development. Prioritizing ecological progress and green development, SASAC has implemented the deployments for carbon peaking and carbon neutrality, formulated and acted on the guidelines to promote central SOEs’ high-quality development and their work toward carbon peaking and carbon neutrality. We have urged enterprises engaged in thermal power, petrochemical, chemical industry, iron and steel, nonferrous metals, and building materials and other industries to accelerate their transformation, and resolutely curbed the haphazard development of energy-intensive and high-emission projects. In 2021, the overall energy consumption per 10,000 yuan of turnover of central SOEs dropped by about 33% from 2012. We support and organize relevant central SOEs to undertake national tasks for developing low-carbon, zero-carbon, and negative-carbon technologies, speed up the development of green and low-carbon industries, and drive their transformation and industrial reform with technological breakthroughs.

 Fifth, resolutely preventing and defusing major risks, and holding the line on safety in the course of pursuing high-quality development. SASAC has improved the risk prevention and control system, with the focus on moving risk monitoring upfront, so as to enhance the ability to analyze and identify major risks, and respond swiftly and effectively. We have confirmed the target debt ratio of each and every central SOE as part of their performance assessment, and intensified the management and guidance for those with a high debt ratio. Special risk control inspections are conducted in SOEs engaged in real estate and fund business, and measures are adopted to regulate trust, financial leasing and fund operation, and strengthen financing guarantee management. We regularly check risks of bond redemption, comprehensively troubleshoot violations of laws and regulations and operating risks occurring overseas, and demand corrections and hold accountable those in charge, defusing various hidden hazards precisely and properly. In face of mounting difficulties and challenges, central SOEs haven’t had one single case of bond default since 2017, and major operating risks are kept under control.

III. Steadfastly deepening SOE reform, and remarkable progress being made in building world-class enterprises at a faster pace

Following General Secretary Xi Jinping’s important instructions on deepening SOE reform, we adheres to and reinforces the Party’s all-round leadership over SOEs, upholds and improves the basic economic system, and keeps to the direction of reform towards the socialist market economy. By implementing the “1+N” document and the Three-year Action Program for SOE reform, SASAC has removed some institutional obstacles, resolved many long-standing problems, and injected new vigor into SOEs. It is taking faster steps toward building world-class enterprises.

First, comprehensively implementing the “Two Consistencies” (namely, upholding Party’s leadership over SOEs is a major political principle, which one must consistently hold on to; building a modern corporate system is the goal of reform, which one must consistently hold on to), with the modern corporate system with Chinese features being more mature. We regard building a modern corporate system with Chinese features as the fundamental task that guides and bears on all other work, which provides a strong institutional guarantee for SOE reform and development. Determined to make the Party’s leadership in corporate governance more organized, institutionalized, and concrete, central SOEs have included Party building in their articles of association. The posts of both secretary of CPC committees (leadership groups) and chairman of the board fall on one person. Central SOEs and their important subsidiaries, and local SOEs and their important subsidiaries have all established the system and mechanism whereby their Party committees (Party groups) could have ex-ante review of substantive matters concerning operation and management, for which a list is also made. The position of Party committees (Party groups) in the governance structure is further clarified and consolidated. To promote various governing entities to fully exert their role, SASAC worked out the Working Rules for Board of Directors of Central SOEs (for Trial Implementation), and rolled out a series of systems and methods regarding the employment and management of external directors and their remuneration, assessment on the board of directors and its members, reporting of major matters by the board, reporting of abnormal matters by external directors, among others. It also promotes central SOEs and their important subsidiaries to form and strengthen the board of directors if and when that’s necessary or imperative, sets up the Party committee for full-time external directors to systematically intensify the management of their selection and discharge of duties, and advances the pilot program that the boards have been empowered to perform their responsibilities. These efforts will better translate the advantages of the modern corporate system with Chinese characteristics into sound and efficient governance.

Second, reinforcing SOEs’ position as independent market entities, and pushing them to merge deeper into the market economy. We have fully completed the corporate system reform, and the independent market entity position of SOEs has been further established legally and institutionally. SASAC, for the first time, completed the definition and classification of functions of central SOEs at all levels, and explores to formulate a catalogue of public welfare businesses and implement the reform on classification of accounting and assessment of central SOEs, laying a solid foundation for their differentiated reform and development. The work of stripping public functions from SOEs and resolving historical issues were brought to an end. SOEs are no longer responsible for the water, electricity and heating supply and property management of the residential communities inhabited by their employees and their families, nor do they continue to undertake the function of municipal and community management. Reform of medical and educational institutions is deepened, reform of collectively-owned enterprises operated by SOEs is basically completed, and SOE retirees are all put under national unified management. These measures effectively address the long-standing problems of having enterprises shouldering the functions of government or act as a community, which enable SOEs to participate in market competition more fairly. 

Third, accelerating the establishment and improvement of market-oriented operating mechanism for higher SOE vitality and efficiency. SASAC consistently deepens the reform of the labor, personnel and remuneration distribution systems, comprehensively promotes the term-based and contract-based management of executives on the principle that “executives can be promoted and demoted”, and actively explores the system of professional managers. By the end of 2021, 97.3% of the management (about 110,000 people) in central SOEs’ subsidiaries had signed contracts, and 42.9% of the management staff have taken their position through competition. Faster steps are taken to establish the market-oriented labor system on the principle that “employees can be hired and fired”. In 2021, 99.5% of new employees in central SOEs were hired through public recruitment, and 4.5% of them, who got a low performance rating, either changed position or were fired. A distribution mechanism that bases remuneration on performance and contributions is established on the principle that “salary can be raised and reduced”, and flexible medium-to-long-term incentives are offered. Cumulatively more than 5,600 subsidiaries of central SOEs that have the right conditions have offered such incentives to 400,000 backbone employees in key positions. SASAC actively and properly deepens the mixed ownership reform, and has introduced matching strategic investors with a high level of identification and coordination through a range of approaches, including increasing capital base and equity stock, reorganization and listing after system reform, conducting M&A and investment, setting up new companies through joint investment, and transferring property rights. By the end of 2021, more than 70% of central SOEs were of mixed ownership, and 70% of them had directors assigned by external investors to participate in corporate governance.

Fourth, implementing special reform programs, and fully exerting the leading and exemplary role of central SOEs in the programs. Thanks to the promotion of typical experience of primary-level enterprises, a batch of examples for successful reform have emerged whose experience is tenable and duplicable. By applying various reform measures, the more than a hundred subsidiaries of the central SOEs and more than a hundred local SOEs selected under the “Double Hundred Action” for SOE reform have seen their main business indicators significantly improved and total labor productivity far higher than the average level of SOEs nationwide. “Demonstrative High-tech Enterprises for Market-oriented Reform” focus on promoting the reform of institutions and mechanisms for technological innovation. The number of such enterprises has grown from 209 to 440, driving more enterprises to develop through innovation. The “Regional Comprehensive Reform Experiment” focuses on leading SOE reform with the reform of state-owned assets supervision and administration. After the first batch of experiments in Shanghai and Shenzhen, the second batch of experimental zones, including Liaoning’s Shenyang, Zhejiang’s Hangzhou, Hubei’s Wuhan, Shaanxi’s Xi’an, and Shandong’s Qingdao, have kicked off the comprehensive reform. SASAC regards the building of world-class enterprises as an important task and has taken solid steps toward that goal. We have selected 11 central SOEs, including China Aerospace Science and Technology Corporation, that feature good basic conditions, eminent main businesses, and conspicuous competitive edges, and urged them to benchmark against top-flight peers, fortify their strengths, and shore up weak links. We have launched an action to benchmark against world-class corporate governance, selected and promoted exemplary enterprises, projects, and models, and strengthened the management system and capability of SOEs across the board. As a result, central SOEs have made remarkable progress in their scale, strengths, and core competitiveness, and those engaged in power grid, communication, electric power, and construction have seen their key efficiency indicators reaching the world-leading level.

IV. Comprehensively fulfilling our duty and mission in accordance with the law, and the state-owned assets supervision and administration system being reshaped systematically

Guided by General Secretary Xi Jinping’s important instructions on strengthening the supervision and administration of state-owned assets, the Party Committee of SASAC has accelerated the all-round transformation in the concepts, priorities, approaches, and directions of supervision and administration. We have continuously improved the system of state-owned assets supervision and administration and gradually formed a new model with Chinese features in this regard, providing a robust guarantee for safeguarding the security of state-owned assets and exerting the state-owned economy’s strategic supportive role.

First, comprehensively fulfilling our duty and forming a functional system of state-owned assets supervision and administration featuring “Three Unifications and Three Combinations”. SASAC is a special organ directly affiliated to the State Council, and the Party Committee of SASAC works for the CPC Central Committee. Firmly grasping this position, we have further clarified SASAC’s three duties – as the investor of central SOEs, as the supervisor and administrator of state-owned assets, and as the organ responsible for the Party building in central SOEs. We promoted the combination of capital management with Party building, the combination of performing the responsibilities of investor with overseeing state-owned assets, and the combination of intra-Party supervision with investor supervision. SASAC has issued and implemented the opinions on accelerating the shift in its function of state-owned assets supervision and administration, dynamically improved the list of its authorities and responsibilities, released the list of matters subject to authorization and power delegation, and readjusted the functions of its internal departments. These measures have made our supervision and administration more well-conceived, targeted, and effective.

Second, continuously refining the approach of supervision and administration, and making our work more professional, systematic, and law-based. To make our supervision and administration more professional, SASAC actively explores and initiates approaches different from those of industrial regulators and public administrators. We have kept improving the system of investment planning, budget and settlement management, performance assessment and remuneration distribution, as well as capital operation and profits management. We also pay more attention to exercise our power and fulfill our duty by refining the SOEs’ articles of association, standardizing the operation of the board of directors, and assigning representatives of shareholder, practicing sound supervision and administration with the features of the investor. To make our supervision and administration more systematic, SASAC coordinates multiple targets concerning stabilizing growth, deepening reform, facilitating innovation, promoting development, and preventing risks, and establishes an online supervision and administration system for state-owned assets and SOEs through collaboration with relevant parties, realizing supervision and administration in all aspects, through the whole process, and along the whole chain. To fully base our work on the law, SASAC intensifies state-owned assets supervision and administration on the law-based track, and exercises its power and discharges its duties in strict accordance with laws and regulations. The regulatory system and working system have been improved to facilitate SASAC’s work, and the efforts to build law-based central SOEs keep advancing.

Third, improving the supervisory system, and continuously strengthening the joint force of supervision. With intra-Party supervision as the main approach, SASAC works to synergize and coordinate various supervisory forces, including supervision by the investor, by disciplinary inspector, by inspection teams, by auditors, and by the public. Supervision is reinforced on such key links as planning, investment, property right, finance, assessment and remuneration distribution, and the selection and appointment of personnel. A reporting mechanism on the risk of major asset losses is established and improved, the institutional system and organizational system for supervision and accountability are refined, and steps are taken to investigate substantial losses of state-owned assets and hold accountable those who have violated rules and regulations. SASAC aims to create a state-owned assets supervision system featuring full coverage, clear division of work, close collaboration, and forceful constraint, and a closed working loop with regulatory check upfront, tracking and monitoring in the process, and supervision and accountability afterwards.

Fourth, accelerating the centralized and unified supervision and administration of profit-oriented state-owned assets, and putting in place a systematic regulatory structure for state-owned assets. Keeping in mind the big and whole picture, SASAC supervises and administers state-owned assets nationwide in a holistic way, and moves faster to put in place a systematic regulatory structure for state-owned assets. Acting on the principle of separating government functions from enterprise management and separating the government’s function of public administration from its function as the investor of state-owned assets, SASAC has consistently pushed for the centralized and unified supervision and administration of profit-oriented state-owned assets. At present, more than 98% state-owned assets of provincial SASACs are under centralized and unified supervision and administration on average. SASAC issued the Notice on Advancing the Construction of a Systematic Regulatory Structure for State-owned Assets. We have built a unified property right supervision system, a sound financial supervision system, a well-aligned performance assessment and remuneration management system, and a three-tiered state-owned assets planning system. This gives rise to a correlated and effectively coordinated working mechanism among the central, provincial and municipal authorities, forming a systematic synergy to push forward the cause of state-owned assets supervision and administration.

V. Remaining mindful of the country’s most fundamental interests, and giving full play to the role of SASAC and SOEs as the pillar and ballast to the country

General Secretary Xi Jinping gave the important instruction that SOEs should be the most reliable force that the Party and the country can trust, and be an important force to resolutely implement the CPC Central Committee’s decisions and deployments, to put into practice the new development philosophy and comprehensively deepen the reform, to carry out the “Going Global” strategy, the Belt and Road Initiative (BRI), and other major strategies, to enhance the overall national strength, promote economic and social development, and guarantee and improve people’s livelihood, and to help the Party win the great historic struggle with many new features. Keeping this firmly in mind, we have planned and promoted work around the cause of the Party and the country, and conscientiously practiced the Party’s will, implemented the nation’s strategies, and worked hard to ensure people’s livelihood. We have made utmost efforts to support major national strategies, contribute to economic and social development, and played a backbone role in addressing grave risks and challenges.

First, proactively serving major national strategies to help foster the new development dynamic. Focusing on the implementation of massive national and regional strategies such as the Beijing-Tianjin-Hebei integrated development, the strategy for integrated development of the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area, we have promoted the central-local coordination and cooperation, taken an active part in the construction of the Xiongan New Area, and signed strategic cooperation agreements on 3,849 projects since the 18th CPC National Congress. We have also advanced the joint construction of the BRI with high quality, optimized the regional and overseas layout of state-owned capital, and enhanced our  capability of resources allocation and integration globally. Central SOEs currently have nearly 8 trillion yuan of assets overseas, which are distributed in more than 180 countries and regions. They also undertake more than 8,000 projects overseas. A group of landmark projects, such as the China-Laos Railway and the Port of Piraeus in Greece, have been great successes, and a number of high-quality products, related to high-speed railway and nuclear power, have been exported, giving a strong boost to upstream and downstream enterprises to go global together.

Second, playing a critical role in time of crisis by undertaking urgent, difficult, dangerous and arduous tasks. When the COVID-19 pandemic caught us all off guard in 2020, we reacted immediately and went all out to combat the virus. Some central SOEs built the Huoshenshan and Leishenshan hospitals at an incredible speed. Some having never produced anti-pandemic medical supplies before, either immediately turned to producing medical masks, protective suits, and other urgently needed supplies, or developed from scratch key equipment such as mask machines and plodders against the clock, or pushed the research, development and application of testing agents and vaccines. They did all they could to ensure the supply of basic products and livelihood services against all kinds of difficulties. This year, central SOEs once again mobilized resources in emergency mode to support Jilin, Shanghai and other places fighting the pandemic. In the face of natural disasters like earthquakes, mudslides and floods, they always put people’s lives first, follow the CPC Central Committee’s orders, and fight on the front line. With their expertise and professional advantages, central SOEs have repaired roads and railways, relocated trapped residents, ensured the supply of materials, and protected people’s lives and properties.

Third, providing full support for poverty alleviation toward the goal of common prosperity. Making full use of their advantageous resources and expertise, central SOEs have promoted infrastructure construction in impoverished areas in big strides by building roads and bridges and providing internet access and electricity. Carrying out anti-poverty programs through promoting consumption, industrial development, and job creation, SASAC and central SOEs have cumulatively invested and introduced more than 100 billion yuan of funds from various sources, and assigned 37,000 officials to poor areas for poverty alleviation. The 248 key counties which included in the national plan for poverty alleviation and received pair-up assistance from central SOEs have all got rid of poverty. Even though those counties are lifted out of poverty, the anti-poverty responsibilities, policies, aid and supervision should be continued. SASAC and central SOEs have continued to promote rural vitalization, brought the much-needed capital, launch aid projects, and assign officials, supporting those areas in a wide range of aspects, covering industry, employment, consumption, education, and medical care. Committed to increasing people’s well-being in a sustained way, they conscientiously follow the nation’s macro regulation and arrangements. Central SOEs work hard to ensure the supply of vital necessities concerning the lifeline of the national economy and people’s livelihood such as coal, electricity, petroleum, and natural gas and keep their prices stable, step up the operation and management of communication, railway, aviation and other basic networks, and advance the new round of rural grid renovation and upgrade and the program to bring three-phase power to every village, creating better production and living conditions for the people.

VI. Comprehensively strengthening Party building in central SOEs to guarantee their high-quality development

 Consistently deepening our study and implementation of General Secretary Xi Jinping's important speech at the National Conference on Party Building in SOEs, SASAC firmly shoulders the significant political responsibility for Party governance, and carries out five special programs in succession – the Year of Party Building Implementation, the Year of Party Building Quality Enhancement, the Year of Party Building Advancement at the Primary Level, the Year of Party Building Deepening, and the Year of Party Building Innovation and Expansion. These efforts to make the Party’s leadership and Party building more strict, concrete and strong in SOEs have provided a firm political guarantee for their reform and development.

  First, continuously strengthening the Party building work system, especially at the primary-level. The responsibility for Party building should be assigned to specific persons and translated into concrete actions at every level. SASAC rolls out three systems – the Party committees (Party groups) of central SOEs report annually to SASAC Party Committee on their Party building work, the secretaries of the Party committees (Party groups) of central SOEs make in-person reports on their work to SASAC Party Committee, and the secretaries of primary-level Party organizations report on their Party building work and receive appraisal and assessment thereby. SASAC has issued the measures for implementing the system of responsibility for Party building in central SOEs, and conducted assessment for five consecutive years. Through the promotion of standardized Party building work at the primary-level, central SOEs have cumulatively established more than 40,000 new Party organizations and recruited 1,148,000 new Party members since the 18th CPC National Congress. Primary-level Party organizations have been formed “wherever the conditions are right” and new Party committees are elected on schedule.

Second, upholding the Party’s leadership over executives and personnel in SOEs to build a strong and high-caliber team. In accordance with the standards that leaders of SOEs should be loyal to the Party, dare to innovate, be resourceful to govern and prosper the enterprises, and be clean and upright, SASAC makes strong efforts to foster a team of high-caliber, professional SOE leaders, energetically promotes the spirit of entrepreneurship, and reinforces the cultivation and selection of excellent youths. Nearly 100 “post-1970s” have been either included in the leadership teams of central SOEs or assigned to local Party organs or government departments. Carrying out the strategy of invigorating SOEs with top talent in the new era, SASAC has issued three guiding opinions for central SOEs to cultivate a team of sci-tech professionals, a team of operating and managerial professionals, and a team of highly skilled personnel. It has also launched several talent development programs, including the Model SOEs for Deepening the Institutional and Mechanism Reform for Talent Development, the Outstanding Teams for Sci-tech Innovation, and the Hundred Outstanding Craftsmen Cultivation Program. By the end of 2021, central SOEs had 1.07 million R&D personnel, up by 53% from the end of 2012, and they had 241 academicians of the Chinese Academy of Sciences and the Chinese Academy of Engineering, about 1/7 of the national total.

 Third, reinforcing public communication to forge a strong synergy of solidarity and progress. To reinforce public communication and recognition of state-owned assets supervision and administration authorities and SOEs, SASAC has selected “Role Models of the Times”, “Role Models of Central SOEs”, and “Advanced Models in the Fight Against COVID-19”. Great efforts have been made to not only inherit and carry on the spirit of model workers and the spirit of craftsmanship, but also to promote a host of advanced spirits of the new era created by SOEs since the 18th CPC National Congress, such as the BeiDou spirit, the lunar exploration spirit, and the spirit of manned deep-sea submersible. We have carried out a series of celebrations and publicity activities themed on the centenary of the CPC, the 70th anniversary of the founding of the PRC, the 40th anniversary of reform and opening-up, and the upcoming 20th CPC National Congress, among others. Established programs like “Open Class of SOEs” and “Centennial Tokens” have been continued, exhibitions on Party building under the theme of “Central SOEs always Following the Leadership of the Party” have been staged, and promotional videos have been filmed, all in the endeavor to tell the stories of SOEs well, build extensive consensus and pool strong forces for their reform and development.

Fourth, advancing all-round, strict Party governance in depth to create and consolidate a clean and righteous political ecology. We have persevered in improving the work style, enforcing discipline and combating corruption, acting on the Eight rules on improving Party and government conduct and its implementation rules stipulated by the CPC Central Committee. We have resolved existing corruption cases while showing zero tolerance to new ones, advancing strict Party governance in depth and breadth. Following the guideline of “addressing both symptoms and root causes, both specific cases and general situation, and making systematic improvement by working toward the same goal”, we have made overall arrangements for the inspection and rectification of SASAC Party Committee and central SOEs. With specific rectification programs as the main approach, SASAC has cracked down on undesired phenomenon such as the large number of Beijing liaison offices of central SOEs, headquarters of central SOEs resembling government organs, and running business and enterprises against rules. Special and sustained efforts are made to tackle four problems – overseas corruption, transfer of benefits, rent-setting and rent-seeking, and using public properties for personal purposes. Cases on corruption are shown as a warning to prompt correction, and comprehensive efforts are made to deter and punish, to restrain with regulations, and to raise consciousness and integrity. The anti-corruption campaign has been an overwhelming victory and its results have been fully consolidated.

Embarking on a new journey, we must rally more closely around the CPC Central Committee with Comrade Xi Jinping at its core, and follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. We must staunchly safeguard the establishment of both Comrade Xi Jinping’s core position on the CPC Central Committee and in the Party as a whole and the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. We must reinforce our consciousness of the need to maintain political integrity, think in big-picture terms, follow the core of the CPC leadership, and keep in alignment with the Party’s policies, stay confident in the path, theory, system, and culture of socialism with Chinese characteristics and firmly implement the Two Upholds. Resolutely implementing the decisions and deployments of the CPC Central Committee and the State Council, we will continue to work hard to make SOEs stronger, better, and bigger, move faster to build world-class enterprises, and give full play to the state-owned economy as a leading and strategic supportive force. By doing so, we are committed to making new and greater contributions to building a modern socialist country in all respects, achieving the second centenary goal, realizing the Chinese Dream of national rejuvenation, and welcoming the successful convening of the 20th CPC National Congress with concrete actions.