In 2018, central state-owned enterprises will continue to reduce excess coal production capacity by 12.65 million tons

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At the meeting of heads of central state-owned enterprises and local state-owned assets supervision commissions, Xiao Yaqing, head of the State Council’s State-owned Assets Supervision and Administration Commission, stated that in 2018 these enterprises needed to reduce excess coal production by 12.65 million tons. He also warned them to be cautious of PPP projects that aim solely at expanding scale (Note: PPP stands for Public-Private-Partnership; it refers to a partnership between public entities and private organizations for the joint development of urban infrastructure projects or for providing certain public goods and services. Such partnerships are based on concession agreements, and contracts are signed to define the rights and obligations of each party, thereby ensuring the successful completion of the project and enabling all parties involved to achieve results that are better than those that could be achieved if they acted alone). 　　Xiao Yaqing noted that in 2018, central state-owned enterprises were required to achieve the goals of reducing excess coal production by 12.65 million tons and integrating 80 million tons of coal production capacity; they were also expected to actively promote the reduction of coal-based power generation capacity, while working to address excess production capacity in industries such as non-ferrous metals, shipbuilding, refining, and building materials. By the end of this year, efforts should be made to reduce the number of corporate entities and bring down the number of management levels to 5 or less. 　　More resources should be allocated to emerging industries such as ecological protection and restoration, new energy vehicles, the Beidou industry, network security, industrial Internet, logistics big data, digital healthcare, and new materials, while accelerating development in the field of artificial intelligence. At present, the number of central state-owned enterprises under the supervision of the State-owned Assets Supervision and Administration Commission has been reduced to 98. In 2018, strategic reorganizations of such enterprises in sectors such as equipment manufacturing, coal, power, telecommunications, and chemicals are to be carried out steadily. Furthermore, in the reform of mixed-ownership structures, it is necessary to explore systems such as preferred shares and specially managed shares, and to expand the scope of pilot programs for employee stock ownership. 　　In terms of risk prevention and control, efforts should be made to further reduce the proportion of interest-bearing liabilities of central state-owned enterprises in their total liabilities, while keeping the average debt-to-asset ratio on a downward trend. 　　Xiao Yaqing pointed out that to strictly control risks, supervision by the State-owned Assets Supervision and Administration Commission alone is far from sufficient; what’s key is that each enterprise itself must implement the management requirements outlined in the negative list. Xiao Yaqing also emphasized in particular: \"Care should be taken with those PPP projects that merely pursue large scale but lack economic viability.\" ” 　　It is reported that in 2018, the State-owned Assets Supervision and Administration Commission will issue detailed rules for the \"Measures for the Supervision and Management of Investments by Central State-owned Enterprises\" and the \"Measures for the Supervision and Management of Overseas Investments by Central State-owned Enterprises.\" Central state-owned enterprises are required to strictly adhere to the requirements related to the negative list of investment projects, and any investment activities that exceed their capacity to bear such risks are strictly prohibited.