Experts Visited: How Do State-Owned Automotive Enterprises Reform the Reform?

The topic originated: State-owned enterprise reform has always been a topic of focus. This topic was once again reiterated at the Third Plenary Session of the 16th Central Committee that was just concluded. "The communique of the Third Plenary Session of the Sixteenth Central Committee of the Communist Party of China" (hereinafter referred to as the "Gazette") pointed out: "We must vigorously develop the mixed-ownership economy in which state-owned capital, collective capital, and non-public capital participate, and realize the diversification of investment subjects. In order to make shares a major form of public ownership, enterprises that need to be controlled by state-owned capital should exercise absolute or relative control in different circumstances, establish a sound supervision system for the management of state-owned assets, deepen the reform of state-owned enterprises, and improve the governance structure of corporate legal persons. Accelerate and improve the reform of monopoly industries."

As an authoritative media in the automotive industry, we are particularly concerned about the survival status, reform ideas, and development prospects of state-owned auto manufacturers. Just before National Day, the reporter also received a phone call from the technical vice president of Jilin Ruibao Car Lights Co., Ltd., saying that after reading an exclusive interview with reporters about the financial director of Asia Pacific of Hella, he hoped that there would be foreign investment like Haila. According to the reporter’s understanding, Ruibao Auto Lighting Company is in the process of transition from state-owned to private-owned enterprises. There are many state-owned auto companies that actively seek out their way out of the company, and we sincerely feel that the auto companies’ sense of change will change quickly and greatly. happy.

The “Big Three” is a state-owned company that we are proud of. FAW is changing. SAIC is changing. The intensity of the Dongfeng reform is obvious to all. If horizontal comparisons are made from an industry perspective, from 1993 when the state determined that SOEs must establish a modern enterprise system, it should be said that the state-owned enterprises in the automotive industry have been the earliest, most thorough, and effective, and this has been achieved by Hafei, Changan and many others. The body of the company can be confirmed.

Of course, at the same time, we are also deeply aware that in the face of a thriving domestic auto market, many state-owned enterprises that have a difficult survival status need to update their consciousness, change their minds, and join the reform team. In order to understand more deeply the spirit of the Third Plenary Session of the 16th CPC Central Committee and understand more about the status of the state-owned economy in the national economy and the problems and opportunities faced by the reform of state-owned enterprises, we invited the Academy of Social Sciences to engage in the reform of state-owned enterprises. Research expert Dr. Luo Zhongwei.

China Automotive News: How do you view the relationship between the size of a country's state-owned capital and the development of the country?

Luo Zhongwei: This problem cannot be simply seen. When we originally planned for an economy, we basically had no “non-public capital”. When we went to a market economy, the proportion of state-owned capital gradually declined. The proportion of “non-public capital”, private capital, and foreign capital increased gradually. Before the end of 2001, our total state-owned net assets have been increasing, but the contribution rate of the state-owned economy to the total economy has gradually decreased. In the future, the proportion of the state-owned economy should be reduced. In countries with a developed market economy, the state-owned economy accounts for about 5% of the total economy, and developing countries account for about 10%. The proportion of well-run state-owned enterprises in some countries in the world is similar in the national economy. For example, there are only 59 state-owned enterprises in Sweden, accounting for about 7% of the national GDP and 5% of total employment. Temasek Financial Holding Co., Ltd. in Singapore owns 20 large "company-linked companies", accounting for 12% of Singapore's GDP. Among them, 12 companies are listed on the Singapore Stock Exchange, accounting for about 20% of the market value. New Zealand’s 16 state-owned enterprises account for about 12% of GDP. In 1990, public enterprises in South Korea accounted for 9.4% of GDP and 2.5% of total employment. As long as they have the ability to stop harmful developments, some governments are satisfied that they hold minority shares in strategic enterprises and allow private individuals to hold majority shares.

China Automotive News: Do you think that the concept of "state-owned enterprise" that we now emphasize is different from the previous concept of "state-owned enterprise"?

Luo Zhongwei: It should be said that there is no significant difference. But this time the "Gazette" emphasized "absolute holding and relative holding". It may be that in the past, we all thought that state-owned enterprises were absolute holdings of state-owned capital, and 51% of the shares were absolute holdings. In fact, as long as the state-owned capital holding companies are state-owned enterprises.

China Auto News: The "Gazette" pointed out that "Allow non-public capital to enter infrastructure, public utilities, and other industries and fields that are not banned by laws and regulations." What industries do you think will be liberalized?

Luo Zhongwei: The aviation and petroleum industries cannot be liberalized, and a certain part of the railway business is possible. These three industries all involve a network problem. Because economies of scale are not suitable for multiple competitions, it is easy to waste resources. The role of the auto industry in the national economy is very important. I think that for a long period of time, the country must maintain its status as the “big three” in the entire automotive industry.

China Automotive News: How do you see the "Dongfeng" reform?

Luo Zhongwei: The reform of state-owned enterprises must be conducted in response to the specific conditions of different industries and different companies. It must not be said that there are any fixed models. The final result of the Dongfeng reform certainly needs time to test it, but I personally prefer it because it meets the general direction we discussed above. It should be said that the reform of such large-scale state-owned enterprises is very difficult, and the key is how to handle the existing assets. At that time, China Mobile's restructuring was a specific part of me. It brought the main business of mobile communications to the market, stripped off other auxiliary businesses and established another company to receive subsidies from listed companies. The restructuring of CNOOC was very successful. The three companies it divided into were listed separately and their operating results were good. Of course, this is also related to the current development of the industry.

China Automotive News: How should we understand the “Public property rights are the core and main content of the ownership system in the Communiqué. What is the property rights system with clear ownership, clear rights and responsibilities, strict protection, and smooth circulation?”

Luo Zhongwei: In the past, we have always emphasized the establishment of a modern enterprise system. Now it is mentioned, but it is the first time that the property rights system has been emphasized. This should be a relatively large change. In the process of reorganization of state-owned enterprises, regardless of whether they are in the form of an auction or in the form of equity participation, the final equity ownership must be implemented on a specific paper. In the past, we had a lot of disputes due to unclear ownership, or the loss of state-owned assets, or the individual’s share of equity and state-owned equity are mixed and difficult to distinguish. “Clearly defined powers and responsibilities” is well understood. “Strict protection” means that the outside world must strictly protect the ownership of property rights. "Transferring smoothly" means that the equity itself is tradable and can be transferred through cash. The biggest problem in this piece is that state-owned shares cannot normally circulate in the securities market. We must solve the big problem of reducing state-owned shares as soon as possible. Of course, the major domestic automobile companies also face such difficulties.

China Automotive News: What do you think are the difficulties facing the reform of state-owned enterprises in the automotive industry?

Luo Zhongwei: The environmental changes mainly from the aspects of institutions, policies, markets, technologies, and resources have brought severe challenges to the reform and development of state-owned enterprises. Before joining the WTO, our state-owned enterprises enjoy the triple protection policy: the first is the protection of the government through tariffs and non-tariff barriers; the second is the incorporation of certain industries or sectors into the scope of government control or the implementation of industrial policy discrimination. Allowing or restricting the entry of non-state-owned enterprises; the third is that the government provides subsidies to those state-owned enterprises that bear the policy burden by distorting product and factor prices, tax incentives, and bank soft loans. Now, these policy protections have gradually disappeared. This is a severe test for domestic auto companies.

China Auto News: At this meeting, some experts pointed out that “Ten years ago, all parties were confined to the background of the era at that time, and they did not recognize the status of SOEs as a special enterprise that solved special problems. They wanted to make SOEs solve special problems. And want the state-owned enterprises to have the efficiency of the general enterprises, obviously both can not have both."

Luo Zhongwei: This emphasis is necessary. The modern enterprise system must be established, but it is by no means a short period of time. As state-owned enterprises play an important role in social life, they must pay attention to "striving for stability and progress while deepening reforms."

At the same time, the reforms in the other four areas that are closely related to the state-owned enterprises also need to be deepened: First, the management, supervision, and operation system reform of state-owned capital. The second is the reform of the social security system. It must be led by the government, with the government, enterprises, and social mediators making sustained joint efforts. The third is the reform of corporate governance mechanisms. Effective corporate governance can guarantee the ultimate control of investors, and it is the separation of ownership and management rights. It is the micro-institutional basis of the state-owned asset management system in the future. Therefore, an effective corporate corporate governance structure is the core of the company system, and it is the institutional guarantee that the state-owned enterprises are becoming standardized and mature and truly become the main players in the market competition. The fourth is the reform of corporate bankruptcy mechanisms. The business environment of an enterprise is important, and the environment in which the company exits the market is equally important. The bankruptcy mechanism is a timely mechanism to resolve contradictions. The healthy operation of the market economic system must establish a sound bankruptcy system. A good bankruptcy system, a modern accounting system, a modern auditing system, and good corporate governance are the most important issues that must be addressed in the healthy development of state-owned enterprises.

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