Jobs for boys at state companies

PUBLISHED : Tuesday, 17 May, 2011, 12:00am
UPDATED : Tuesday, 17 May, 2011, 12:00am


More than 40 per cent of top business executives at major state-owned enterprises hired in the past eight years by the central government's Global Talent Hunt were internal applicants.

Analysts say the finding raises concerns of potential nepotism and mismanagement of state assets.

The Organisation Department of the Communist Party's Central Committee and State-owned Assets Supervision and Administration Commission (Sasac) has been tasked with the recruitment of top executives for the mainland's strategically important SOEs since 2001.

Citing Sasac information, The Beijing News said that of the 122 top SOE vacancies posted by the commission since 2003, 51 went to internal applicants. Another 57 positions were filled by applicants from other state-owned companies, which is allowed under the Global Talent Hunt.

Only three recruits came from a foreign company. Among them was Ceng Bing who was bureau chief for the Guangzhou office of the French firm bioMerieux before being selected in 2004 to be China National Biotec Group deputy general manager.

Last year, the commission made public the names of 14 candidates it had picked for key top SOE posts earlier in March - eight were internal applicants. One was Gu Jun who became general manager of the State Nuclear Power Technology Corporation (SNPTC) after holding the same job at sister company Sanmen Nuclear Power.

Dr Yan Yu, director of Peking University's Government Management and Industry Development Research Institute, said the global recruitment initiative was a creative model of overseeing state assets as it separated ownership issues from management.

The initiative would also help boost the competitive edge of SOEs by removing some of the administrative barriers that many state-owned enterprises faced.

However, he said that if the statistics were substantiated, the global recruitment drive was nothing but a formality.

'As a result, the way those SOEs are managed can't improve because of the lack of new blood,' he said. 'The SOEs are often in a position to monopolise certain sectors, and through monopoly they believe they can make profits by hiking prices instead of raising product quality.'

Yan said that even if the internal candidates were as competent as recruiters had promoted, their competency should not be judged by a handful, but open to wider scrutiny and held to greater accountability.

'The management is the last line of defence of state assets, and if these people cannot compete globally, we have good reasons to be concerned whether these assets are in good hands,' he said.