Reforms push for SOEs to 'lead building of modern system'

A new round of reforms and upgrading for state-owned enterprises will start soon, according to the China Securities Journal.

The SOEs include China Railway Construction (1186) and Southern Power Grid, and the reforms are being stepped up in cities such as Chongqing and Guangzhou.

China Railway Construction is stepping up the pace of its reforms on a bigger scale and at a deeper level to increase its goals for this year and to develop itself into a leading global builder, according to the Journal.

Guotai Junan Securities (2611) was quoted as saying that this new round of reforms will prioritize improving core competitiveness and enhancing core functions in a bid to modernize the existing SOEs.

The brokerage expects market valuations of SOEs will be upgraded in the future, as the dividend increase and share buybacks can lift returns for shareholders. Moreover, Guotai Junan said, equity incentives and strategic reorganization will enhance operational efficiency.

Meanwhile, the Belt and Road initiative will offer overseas access, said Guotai Junan.

The brokerage was cited as saying that SOEs have been tasked with the mission of leading the construction of a modernized industrial system.

In addition, some experts believe that with the help of the capital market the SOEs can better carry out mixed reform, mergers and acquisitions, reorganization, asset listing, layout of the new economy, and integration of upstream and downstream industry chain, to promote the SOEs to be "bigger, stronger and better."

The experts think the reforms have become an important way to enhance the competitiveness of Chinese enterprises amid geopolitical tensions.