China to develop ‘national team’ of state-owned giants, but efficiency concerns linger
- China Baowu Steel Group became the world’s largest steelmaker last week, when it announced output hit a record 100 million tonnes this year
- The company’s success has highlighted Beijing’s goal of creating a ‘national team’ of globally competitive, innovative state-owned enterprises
Chen Derong, the chairman of China Baowu Steel Group, broke into tears last week as he announced the company had produced a record 100 million tonnes of steel this year.
It was a “dream come true,” Chen said, as the Shanghai-based mill surpassed ArcelorMittal, an Indian-Luxembourg multinational, to become the world’s largest producer and highest-earning steelmaker.
“Central government SOEs must be the ‘national team’ that can provide solid support for economic and social development,” Hao Peng, head of the State-owned Assets Supervision and Administration Commission (SASAC), said at the agency’s annual conference on Friday, just two days after Baowu celebrated its accomplishment.
We must build a group of industrial champions, a group of technologically-innovative pioneers, a group of leaders in specialty fields
“We must build a group of industrial champions, a group of technologically-innovative pioneers, a group of leaders in specialty fields, and a group of enterprises that can guarantee supply of basic [materials and goods],” he said, while outlining priorities for 2021.
The combined assets of China’s 97 central government-owned enterprises are expected to reach 69 trillion yuan (US$10.5 trillion) this year, an increase of 45 per cent from five years ago, according to data released by SASAC, which oversees the firms. The average annual growth of revenues and profits were 5.6 per cent and 8.9 per cent, respectively, over the same period.
About half of the SOEs – including China Mobile, the China National Petroleum Corporation and Baowu – are on Fortune’s list of the world’s top 500 companies.