“drive industries like new energy, new materials,
aerospace and intelligent manufacturing”.
Specifically, the following efforts will be made:
(1) China will implement sole proprietorship or
shareholding in fields like: water conservation, hydropower and navigation-hydropower
integration hubs in important river basins;
natural monopolies like oil and natural gas
trunk pipeline networks, power grids and
nuclear power; and reduce excess capacity in
the coal industry;
(2) China will encourage central governmentadministered state-owned enterprises in
power, new energy and oil and gas pipelines
to fund specialist joint-stock platforms; and
(3) China will reorganise central governmentadministered state-owned enterprises in the
upstream and downstream coal, power and
metals industries, which will provide a model
for state-owned capital in the energy sector.
Fourth, state-owned energy enterprises will be
reorganised into state-owned capital investment
companies. The function of these companies will
be to optimise the distribution of state-owned
capital through the entry or withdrawal or flow of
state-owned capital in the energy industry, and to
pool the advantages of state-owned energy
enterprises and enhance their operational efficiency and international competitiveness. The
state-owned capital investment company reform
pilot is at SDIC and the Shenhua Group. The goal
of the Guiding Opinions on Restructuring and
Reorganising Central Government-Administered
State-Owned Enterprises is to “create a mechanism for the entry or withdrawal or flow of
state-owned capital” and to “reorganise central
government-administered energy enterprises into
state-owned capital investment and operational
companies”. Some local governments have
identified the reform pilot of reorganising
provincial government-administered energy
enterprises, such as those engaged in the coal
business, into local state-owned capital investment companies.
Fifth, state-owned energy enterprises will be
encouraged to develop mixed ownership. The
development of mixed ownership is an important
measure to reform the state-owned capital management system and the internal mechanisms of
state-owned enterprises. The 1+N policy system
includes special policy arrangements, such as the
Opinions on the Development of the Mixed
Ownership of State-Owned Enterprises, which
was introduced in September 2015, and the
Opinions on the Employee Stock Ownership
Pilot of State-Held Mixed Ownership Enterprises, which was launched in August 2016. The
mixed ownership reform of state-owned enterprises is described in other documents as well.
The Guiding Opinions on Restructuring and
Reorganising Central Government-Administered
State-Owned Enterprises emphasises that China
will maintain state-owned capital’s control of key
industries and sectors, while supporting the participation of non-state-owned capital. The Opinions on Deepening Electricity System Reform,
introduced in March 2015, states that China will
“steadily reform, liberalise and open electricity
retail to private capital in an orderly manner”,
“encourage private capital to invest in power
distribution” and “gradually open power distribution investment to market participants that
meet requirements, and encourage the development of distribution businesses based on mixed
ownership”. The Opinions on Deepening Oil and
Natural Gas System Reform, introduced in May
2017, states that China will “improve the corporate governance structure of state-owned oil
and gas enterprises and encourage them to
diversify their ownership structure and allow
mixed ownership, if conditions permit”. In the
coal sector, Shenhua Group has been identified
as one of the pilots for mixed ownership reform
of central government-administered state-owned
enterprises.
Sixth, the supply-side structural reform of
state-owned energy enterprises will be deepened.
Downsizing state-owned energy enterprises is a
key element of supply-side structural reform. At
present, it primarily involves three aspects.
(1) Tackling the hardest problems in the reform
of state-owned energy enterprises. This primarily refers to deepening electricity and oil
Special Report 4: China’s Energy System Revolution
585
aerospace and intelligent manufacturing”.
Specifically, the following efforts will be made:
(1) China will implement sole proprietorship or
shareholding in fields like: water conservation, hydropower and navigation-hydropower
integration hubs in important river basins;
natural monopolies like oil and natural gas
trunk pipeline networks, power grids and
nuclear power; and reduce excess capacity in
the coal industry;
(2) China will encourage central governmentadministered state-owned enterprises in
power, new energy and oil and gas pipelines
to fund specialist joint-stock platforms; and
(3) China will reorganise central governmentadministered state-owned enterprises in the
upstream and downstream coal, power and
metals industries, which will provide a model
for state-owned capital in the energy sector.
Fourth, state-owned energy enterprises will be
reorganised into state-owned capital investment
companies. The function of these companies will
be to optimise the distribution of state-owned
capital through the entry or withdrawal or flow of
state-owned capital in the energy industry, and to
pool the advantages of state-owned energy
enterprises and enhance their operational efficiency and international competitiveness. The
state-owned capital investment company reform
pilot is at SDIC and the Shenhua Group. The goal
of the Guiding Opinions on Restructuring and
Reorganising Central Government-Administered
State-Owned Enterprises is to “create a mechanism for the entry or withdrawal or flow of
state-owned capital” and to “reorganise central
government-administered energy enterprises into
state-owned capital investment and operational
companies”. Some local governments have
identified the reform pilot of reorganising
provincial government-administered energy
enterprises, such as those engaged in the coal
business, into local state-owned capital investment companies.
Fifth, state-owned energy enterprises will be
encouraged to develop mixed ownership. The
development of mixed ownership is an important
measure to reform the state-owned capital management system and the internal mechanisms of
state-owned enterprises. The 1+N policy system
includes special policy arrangements, such as the
Opinions on the Development of the Mixed
Ownership of State-Owned Enterprises, which
was introduced in September 2015, and the
Opinions on the Employee Stock Ownership
Pilot of State-Held Mixed Ownership Enterprises, which was launched in August 2016. The
mixed ownership reform of state-owned enterprises is described in other documents as well.
The Guiding Opinions on Restructuring and
Reorganising Central Government-Administered
State-Owned Enterprises emphasises that China
will maintain state-owned capital’s control of key
industries and sectors, while supporting the participation of non-state-owned capital. The Opinions on Deepening Electricity System Reform,
introduced in March 2015, states that China will
“steadily reform, liberalise and open electricity
retail to private capital in an orderly manner”,
“encourage private capital to invest in power
distribution” and “gradually open power distribution investment to market participants that
meet requirements, and encourage the development of distribution businesses based on mixed
ownership”. The Opinions on Deepening Oil and
Natural Gas System Reform, introduced in May
2017, states that China will “improve the corporate governance structure of state-owned oil
and gas enterprises and encourage them to
diversify their ownership structure and allow
mixed ownership, if conditions permit”. In the
coal sector, Shenhua Group has been identified
as one of the pilots for mixed ownership reform
of central government-administered state-owned
enterprises.
Sixth, the supply-side structural reform of
state-owned energy enterprises will be deepened.
Downsizing state-owned energy enterprises is a
key element of supply-side structural reform. At
present, it primarily involves three aspects.
(1) Tackling the hardest problems in the reform
of state-owned energy enterprises. This primarily refers to deepening electricity and oil
Special Report 4: China’s Energy System Revolution
585