China sets up new bureaus to drive innovation and carbon neutrality at state firms

Move from state assets watchdog in line with China’s new long-term growth model, observer says

China has about 130,000 state firms at the central and local levels, including 97 industrial conglomerates reporting directly to Sasac

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China’s 2030 goal is to cut carbon dioxide emissions per unit of GDP by more than 65 per cent from 2005 levels. Photo: TNS

Published: 8:00pm, 19 Mar 2022Updated: 8:00pm, 19 Mar 2022

China’s state assets watchdog has set up two new bureaus to strengthen the role of state-owned enterprises (SOEs) in the national innovation and social responsibility drive, especially relating to carbon emissions.

The newly created innovation bureau will be tasked with driving technology upgrades, the incubation of new industries, and the development and application of core technology at SOEs, according to the State-owned Assets Supervision and Administration Commission of the State Council (Sasac).

The social responsibility unit, meanwhile, will aim to strengthen the role of SOEs in energy conservation, environmental protection and youth-focused philanthropy, as well as increasing investments in the Xinjiang and Tibet regions. It has also been tasked with directing state enterprises to cut greenhouse gas emissions, as part of China’s carbon neutral goals.

“The creation of the two new bureaus is quite in line with China’s new growth model in the long term, which highlights technological advancement and carbon neutrality targets,” said Dong Jinyue, senior China economist at BBVA Research.

China has about 130,000 state firms at the central and local government levels, the most important of which are the 97 industrial conglomerates that report directly to Sasac, including China National Petroleum Corp, State Grid and China Mobile.

“Most Chinese large power companies are state-owned and many of them have set ambitious renewable capacity expansion plans,” Lisa Tao, senior credit analyst at Invesco, wrote on the company website.

The SOEs had to respond to the 2030 policy target of cutting carbon dioxide emissions per unit of GDP by more than 65 per cent compared to 2005 levels, Tao noted. Non-fossil energy is expected to account for about 25 per cent of China’s primary energy consumption by that time, up from 15.3 per cent in 2019.