Chinese SOEs are encouraged to improve, Energy and AI are the main focus

Donggang station in Tangshan, Hebei Province, has become a center for the import of iron ore and the shipment of coal. As of May 28, the station had unloaded 36 million metric tons of coal and 3.35 million tons of iron ore. (Wang Zhao/For China Daily)

JAKARTA - China is again pushing for state-owned enterprise reforms. This time, the pressure is not only on business efficiency, but also on clean energy, supply resilience, artificial intelligence, and a more integrated national market.

Quoted from a report by China Daily, Friday, June 5, the National Development and Reform Commission or NDRC held a meeting with a number of SOEs on Tuesday. The main agenda is to deepen corporate reform, strengthen green development, maintain energy security, and accelerate the formation of an integrated national market.

The meeting was attended by the heads of seven major SOEs. Among them are China COSCO Shipping Corp, China Coal Technology and Engineering Group, China Resource Recycling Group, China Logistics Group, China Shulian Logistics Information Co, Air China Cargo, and China Shenhua Coal to Liquid and Chemical Co.

Company leaders reported on production, operational, and reform progress. They also conveyed problems in the field and policy proposals to the government.

NDRC Chairman Zheng Shanjie said this year is the beginning of China's 15th Five-Year Plan for the period 2026-2030. Therefore, state asset and SOE reforms must be deepened in accordance with central government directives.

Zheng asked SOEs to be more sharp in arranging the business structure. Reform, said Zheng, must be oriented towards real goals and problems.

He also emphasized the role of SOEs in technological innovation, industry control, and support for strategic security. This role is considered important to encourage the competitiveness and vitality of state-owned enterprises.

The NDRC also encourages SOEs to support an integrated national market, namely a market with more uniform rules, distribution, and flow of goods throughout the country. State-owned enterprises are asked to help maintain the basic market system and build a modern distribution network.

The issue of energy is an important part. Zheng emphasized the implementation of the "double carbon" strategy, namely the target of reaching the peak of carbon emissions and carbon neutrality. SOEs are also asked to strengthen energy resilience through the use of cleaner coal.

In addition, SOEs are asked to set an example in supporting private small and micro enterprises. The Chinese government wants the growth of various types of business ownership to complement each other.

The companies present stated that they would carry out national plans and continue to deepen reforms. They are also committed to entering deeper into the integrated national market, accelerating the development of modern distribution networks, and reducing logistics costs.

Logistics costs are an important issue because they have a direct impact on economic efficiency. The more expensive the distribution of goods, the heavier the costs borne by industry and consumers.

In line with China's carbon targets, the companies also pledged to strengthen resource recycling, promote the use of cleaner and lower-carbon coal, develop the coal chemical industry, and ensure the supply of essential energy.

Experts assess that SOE reform is no longer limited to corporate governance issues. The reform has become part of the state's strategy in facing global competition, especially in new technology fields such as artificial intelligence or AI.

Shu Wenqi, Deputy Director of the China Institute for Urban Development, said the meeting signaled that state capital should be more directed to strategic and future-oriented industries.

According to Shu, sectors such as AI, advanced manufacturing, as well as energy integration and digital technology are important to strengthen SOEs' position as drivers of technological innovation.

China Daily's report said that SOEs' ability in innovation and industry control is considered important to maintain China's economic resilience amid increasingly complex global competition.

Shu also assessed that China needs to improve the evaluation and incentive system, increase investment in research and development, and build an open and collaborative innovation consortium.

According to Shu, the new state capital can really strengthen development if it is able to lead the mastery of new technologies such as AI, support an integrated national market, and strengthen China's strategic competitiveness.