China charts course for years ahead


The Decision on Major Issues Concerning Comprehensively Deepening Reforms was adopted on 12 November 2013 by the 18th Communist Party of China (CPC) Central Committee at the close of its Third Plenary Session in Beijing. The main points:
Basic economic system

1. Public ownership lies at the heart of China's economic system, while allowing for the development of all types of ownership. Both public and non-public ownership are key components of China's socialist market economy.

2. Optimize the property rights protection system. Property rights are central to ownership, as much in the public as in the non-public economy. The government protects the property rights and legitimate interests of all kinds of ownership by ensuring that all have equal access to production factors, open and fair market competition and the same legal protection and supervision.

3. Actively develop a diversified ownership economy. Diversified ownership integrated through State, collective and private capital is the prime method for materializing the basic economic system, helping improve functioning, increase value and promote the competitiveness of State capital. Allow more State-owned and other ownership enterprises to develop into mixed-ownership enterprises. Non-State shares will be allowed in State capital investment projects. Mixed-ownership enterprises will be allowed to utilize employee stock ownership to form a vested community of capital owners and workers. Improve the State-owned assets-management system and strengthen State-asset supervision by focusing on capital management. Establish a number of State-owned capital operating companies and back the transformation of qualified State-owned enterprises into State-owned investment companies. Transfer some State-owned capital to social security funds. Improve the State-owned capital operation budget system and increase the proportion of State capital gains paid in public financing to 30% by 2020, to be used to assure and improve people's livelihoods.

4. Push for a modern system for State-owned enterprises (SOEs). Accurately define the functions of different SOEs. Increase State capital's contribution to public services. In the natural monopoly industries held by State capital, separating government from enterprises and funds, and franchise operation from government supervision, is the main thrust of the reform. Continue to break up all forms of administrative monopoly. Improve the corporate governance structure by making it coordinated and effective. Establish a professional management system. Introduce long-term incentive and restraint mechanisms, strengthen SOEs’ investment accountability and explore ways to publicize important information, including SOEs' financial budgets. State-owned enterprises should reasonably increase the proportion of market-oriented recruitment, rationally determine and strictly regulate their executive wage levels, and sensibly position benefits, consumption and business spending.

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  Source: ACFTU  2014-05-15

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