SOE bosses warned to stay clean

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The body that oversees major State-owned enterprises (SOE) recently convened a meeting of the central SOEs' senior leaders to stress the importance of clean governance.

Jia Fuxing, the official in charge of discipline inspection in the State-owned Assets Su-pervision and Administration Commission of the State Council (SASAC), warned 150 central SOE leaders, who have been in office since 2008, against abusing their power.

"Your power is granted by the patron of the central SOEs and you should be responsible to this patron and accept its administration and supervision," Jia told these "big bosses," the CPC News website reported Monday.

While it is normal practice to emphasize clean governance to incoming leaders of the central SOEs, the latest move is especially meaningful as ongoing reform results in these enterprises becoming bigger and stronger, while reports of corruption scandals involving them are also mounting, Mao Shoulong, a professor of ad-ministrative management with the Beijing-based Renmin University of China, told the Global Times.

By 2009, the total assets of the 108 central SOEs that publish their financial information had reached 21 trillion yuan ($3.1 trillion), triple the figure of 2003.

Li Baomin, director of SASAC's research center, said Saturday that the number of central SOEs under its supervision will be cut to less than 100 within the year from the current 122, and to between 30 and 50 from 2011 to 2015, when the 12th Five- Year Plan is implemented.

These consolidated enterprises should have their own intellectual property rights and world-famous brands, diversified ownership structures, core world-level competitiveness and a certain amount of soft power as well, Li added.

However, some analysts have expressed concern that this new round of reforms will serve to strengthen the SOEs' monopoly of certain key industries, such as oil, telecommunications, coal, electricity, and civil aviation, sectors that private enterprises do not have access to.

At the same time, it could also make them too big to manage, and become a paradise for corruption.

"Many non-government enterprises want to cooperate with major SOEs to take a share of the profits, giving their officials more temptations," Mao said.

Thirty-five senior executives of large SOEs, such as the former Sinopec chairman Chen Tonghai, faced corruption charges last year.

To add to the problem, most senior managers in SOEs have official titles and many of them are directly selected by the Organization Department of the CPC Central Committee, which adds to the difficulty SASAC faces in trying to do its job.

A few are even at the same official level as the director of SASAC, such as the top leaders of Sinopec and PetroChina.

"It is necessary to emphasize honesty among SOE leaders, but as long as their dual identity - a combination of government officials and entrepreneurs - is not changed, it is difficult to completely solve the problem of corruption," Mao said.

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