“Shandong Mode” of State-Owned Enterprise Reform
[Source June 6, 2016 Lianhe Daily]
"It has worked with Shandong provincial-level guide fund to jointly set up the angel equity investment funds, information industry funds and energy-saving funds; the total size of the fund reaches 3 billion yuan. It has fully opened integrated service overall capital operation mode of Shandong Iron& Steel Group Co., Ltd. It has also established in-depth comprehensive cooperation with a number of large state-owned enterprises; it also becomes the first pilot enterprise that has fully completed the contract management of senior managerial staff... "
Zhongtai Securities is the first station of the concentrated interview of “Seeing Shandong Enterprises from Innovative Development” in 2016. Chairman Li Wei talked about some cases of the company’s engagement in state-owned enterprise and asset reform when introducing the conditions, from which we can see the progress conditions of the new-round reform of state-owned enterprises in our province.
At present, reform of the state-owned enterprises and assets in Shandong is driving into the fast lane. A series of major reform and innovation initiatives such as the transfer of state-owned capital to enrich the social security funds, the formation of alteration of state-owned capital investment and operation companies, promotion of the unified supervision of state-owned assets, the establishment of state-owned cultural asset management council, the implementation of major information disclosure, employment and business evasion of business leaders have been in the forefront of the country, which also forms the "Shandong model" of state-owned enterprise reform.
One important move in improving the state-owned assets management system and building capital-based state-owned capital supervision mode is the formation of state-owned capital investment operation company. Last year, in our province, two batches of seven enterprises took the lead to launch pilot; four functional state-owned investment and operation platforms including Qilu Transportation Development Group, Shandong Development Investment Holding Group Co., Ltd etc. It has also set up the management structure of “state-owned regulatory institutions-state-owned capital investment operation company-state-owned contributive enterprise”, thus clarifying the authority of government and enterprises and making resource allocation and more scientific.
Shandong State-owned Assets Investment Holding Company is among the first batch of pilot enterprises. Last year, it conducted reorganization of part of the business close to the market. "It reorganized the small loan company to Longxin Investment; Shandong Ocean Fishery Company was divested from the provincial aquatic group and reorganized into the investment management company; ocean operations were also newly set up." Shandong State-owned Assets Investment Chairman Li Guangqing said that through capital operation and debt restructuring, it has revitalized the stock of assets and played the existing advantages of resources. He said that it would promote the reorganization and integration of provincial aquaculture group, Shandong State-owned Assets Investment Holding Company and the provincial asset management company recently so as to play the collective advantages, create a unified asset management and operation platform, open up new businesses like stock asset management, financial debt repurchase disposal, capital management products.
If the reorganization of assets is to do the division, then the amplification of investment is multiplication. Last year, Shandong State-owned Assets Investment Holding Company launched the establishment of nine funds with a total size of more than 20 billion yuan. The fund categories cover venture capital, securities, equity investment, involving state-owned enterprise reform, blue economy, cultural tourism, high technology and other fields. Water Resources Engineering Bureau and Longxin Investment Company were included in the mixed ownership reform scope of 58 state-owned enterprises pilot. It is currently developing a program.
As of the end of 2015, consolidated assets of Shandong State-owned Assets Investment Holding Company reached 42.3 billion yuan, with an increase of 17.88%; net assets reached 18.1 billion yuan, with an increase of 20.11%, realizing the total profit of 1.621 billion yuan, with an increase of 28.12%. Among the ownership enterprises, the total profit sum of Inspur, Reguarantee Group and Longxin Investment Company increased by 36.89%, 61.48% and 76.80% respectively. The total profit of Shandong State-owned Assets Investment Holding Company increased by 3 times.
Capital operation will undoubtedly improve the state-owned capital allocation and operational efficiency, and another focus is to speed up the improvement of modern enterprise system and establish professional managers system. Not only Zhongtai Securities executives implement the contract management of senior managers; Shandong Hi-speed Group is also actively improving the corporate governance structure. At present, among nine directors of Shandong Hi-speed Group, six directors have been in place and 5 members of the board of supervisors have been in place. Xu Junfeng, director of the group, said that the rules of procedure were being stepped up, and the rules of procedure of the board of directors have been studied by the chairman of the board of directors.
"It carries out professional managers pilot in 5 enterprises including Manyi Technology Company and designed the work program with performance evaluation and pay management as the focus and contract management as a means." According to Xu Junfeng introduction, the pilot units have been actively doing related work; the pilot program is being developed and supporting measures are gradually mature.
Not long ago, Shandong Radio and Television Network Group that was just selected among the top 30 national cultural enterprises, from 2013 onwards, has begun to accelerate the comprehensive reform with the "three systems" of labor, personnel, distribution as the main body and implement entry exam and entry training and other new mechanisms so as to make the selection of people more open, transparent, scientific. A group of staff with both ability and political take the leadership position. Its branches have also taken many new initiatives and big moves. For example those branches in Jinan and Dongying have broken the boundaries of the implementation and carried out the full appointment; that of Qingdao has deepened the distribution system reform, the performance compensation of which accounts for 70% of the pay. In addition, the group has also launched the share reform market, and strives to become the first listing of Shandong cultural industry.
It is a new challenge to set up the framework of "big state capital" to explore the implementation of classification management and assessment. Recently, the Shandong Provincial State-owned Enterprise Function Definition and Classification Program has been officially issued and implemented, which means that an important classification reform of state-owned enterprises in our province has been thus launched. Program will divide enterprises into commercial category and public welfare category, and further divide commercial category is further divided into Class I and Class II. 23 state-owned enterprises under the provincial management have completed the classification: 17 enterprises including Luxin Group belong to the Class I commercial enterprises and 6 including Salt Industry Group belong to the Class II commercial enterprises. The definition and classification of provincial state-owned enterprises will gradually be in place. Reporters have learned that the layout of the structure of the current state-owned enterprises is not reasonable; functional definition and classification of the provincial state-owned enterprises can help to further clarify the state capital investment, optimize the state-owned capital allocation and enhance the quality of state-owned economy and efficiency as a whole.
It is reported that among the current 70 province-level state-owned enterprise reform tasks in Shangdong, 69 tasks have been completed. Provincial assets supervision and administration admission has transferred 30% of state-owned capital totaling 18.065 billion yuan of the 18 provincial enterprises to the provincial Social Security Fund Council; the effect of diversification of equity is gradually emerging.