China’s private firms urged to join in state sector reforms

China encourages private firms to participate in reforms allowing mixed ownership and restructuring of state-owned enterprises, state media cited Chinese state asset regulator’s deputy head Yuan Ye as saying on Wednesday.

Authorities are encouraging private firms to work with state firms to overcome “choke points” in key technologies, Yuan told a meeting on promoting joint development projects, according to China Securities Journal.

China’s private firms are vital for growth and job creation, but have been reluctant to invest in the face of a fragile economic recovery, despite a government charm offensive.

Investment in the private sector shrank by 0.6% in the first nine months from a year earlier, official data showed, in contrast to a 7.2% gain in state sector investment.

China has been seeking to achieve self-reliance in the technology sector, as the United States increases pressure to restrict Beijing’s access to cutting-edge technologies, such as semiconductors and artificial intelligence.

The State-owned Assets Supervision and Administration Commission will increase efforts to ensure “fair cooperation” between enterprises with all types of ownership to achieve win-win results, Yuan told the meeting.

It will also encourage state-owned enterprises to increase investment in scientific and technological innovation, form consortiums, and build a more unified, open, competitive and orderly “collaborative innovation network,” he said.
Source: Reuters (Reporting by Kevin Yao, Ethan Wang and Ellen Zhang;Editing by Tomasz Janowski and Barbara Lewis)