Fitch: China State-Owned Enterprises On Bumpy Path Towards Reform

Sun Jun 8, 2014 9:00pm EDT

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: China State-Owned Enterprises - On a Bumpy Path Towards Market Reform here SHANGHAI/SINGAPORE, June 08 (Fitch) Fitch Ratings says in a special report that China's post-Third Plenum reforms for state-owned enterprises (SOEs) will be prolonged and are likely to reinforce the state's control of some large and strategic SOEs to further strengthen their positions as pillars of the economy. China's government is still working out details of the reforms to move towards a more market-oriented economy. However, Fitch expects the reforms for SOEs to revolve around: gradual diversification of the state's ownership, redefining SOEs' roles and functions, improving corporate governance, clarifying the role of the State-owned Assets Supervision and Administration Commission (SASAC) and developing the private sector and introducing competition. The challenges to commercialising the SOEs stem from the government's reliance on SOEs' balance sheets and resources to perform many strategic and policy-oriented functions. There will also be resistance from the powerful vested interests that exert significant power and influence over China's policymakers. The complexity of reform is further compounded by the involvement of different levels of government agencies and the interdependence with other major political, economic and financial reforms. Fitch's special report discusses the main themes and challenges for this round of SOE reform. It also examines the current status of SOEs including their corporate structures as well as the role of SASAC in China's SOE landscape. The special report "China State-Owned Enterprises: On a Bumpy Path Towards Market Reform" is available at www.fitchratings.com or by clicking the link above. Contacts: Ying Wang Director +86 21 50973010 Fitch Ratings (Beijing) Ltd. Shanghai Branch 1015, 10/F, IFC Tower A, HSBC Building, 8 Century Avenue, Pudong, Shanghai 200120, China Kalai Pillay Senior Director +65 6796 7221 Andrew Steel Managing Director Head of Asia Pacific Corporate Ratings Group +65 6796 7231 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available on www.fitchratings.com ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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