State-owned enterprises (SOEs) are the backbone forces of the national economy and an important material foundation and political base of socialism with Chinese characteristics. To conscientiously implement the decisions and plans of the Fifth Plenary Session of the 19th CPC Central Committee and the 14th Five-year Plan on deepening reforms of state capital and SOEs and put in place the Three-year Action Plan for the Reform of State-owned Enterprises (2020-2022) (the “Three-year Action Plan”) released by the General Office of the CPC Central Committee and the General Office of the State Council, SZSE has recently formulated the special work plan for serving the reform of SOEs. The plan specified working ideas and specific measures, and provided schedule, roadmap and priorities, to concentrate on assisting state capital and SOEs in deepening reform and becoming better and stronger. It is another targeted measure of SZSE to facilitate the improvement of the quality of SZSE-listed companies and serve national strategies after developing the work plan for implementing the Opinions of the State Council on Further Improving the Quality of Listed Companies.

As at the end of the third quarter, there were 508 SOEs listed on SZSE, accounting for 22% of the total number of companies listed on SZSE and for 44% of A-share listed SOEs. They are from the industries of electronic information, transportation, national defense technology and industry, machinery manufacturing, etc., making up an important part of the national economy. SZSE has always been attaching great importance to serving the reforms of state capital and SOEs by continuously optimizing its regulatory services. Since 2015, 43 SOEs have been listed on SZSE via an IPO process, which has effectively promoted the asset securitization of SOEs, advanced mixed ownership reform of SOEs, and preserved and increased the value of state capital. In the same period, SZSE-listed SOEs have obtained financing of nearly CNY 400 billion through equity financing instruments like IPO, private placement, right issue and convertible bonds. The financing has played an important role in the SOEs’ transformation and upgrading and raising of long-term development funds. 152 major assets restructuring projects have been implemented, with a transaction amount of CNY 853.1 billion. The projects involve not only an alliance of giants in the horizontal direction that focuses on gathering resources and forming a synergy but also connection of the industrial chain in the vertical direction aimed to give better play to the synergistic effect of strategic restructuring. 110 equity incentives or employee stock ownership plans have been conducted, covering 22% of SZSE-listed SOEs, and the average proportion of incentive stocks is 1.77%. The activity and depth of application of relevant instruments by SZSE-listed SOEs both lead the average levels of SOEs on the market. The plans have played a positive role in stimulating the motivation of core staff and enhancing innovation and development vitality. SOE issuers have issued 1,607 fixed income products on the SZSE market, with a financing amount of CNY 1.99 trillion. SZSE has actively supported their diversified financing demands.

Practice shows that under the framework of the CPC Central Committee and the State Council to strengthen top-level design and advance the reform of SOEs in all respects, SZSE’s multi-tiered capital market has become a basic force to guide, support and serve the reform of SOEs, and has formed good reform demonstration effect and quality innovation capital agglomeration effect.

At the critical stage of the reform of SOEs, the General Office of the CPC Central Committee and the General Office of the State Council issued the Three-year Action Plan, sounding the bugle call for reform again and entrusting new missions and responsibilities to the capital market. Under the leadership of China Securities Regulatory Commission (CSRC), SZSE has earnestly implemented the Three-year Action Plan. Centering on its regulatory and service duties and the characteristics of the SZSE market, SZSE has formulated 16 specific working arrangements for serving reforms of state capital and SOEs in depth, which mainly involve the following five aspects:

First, to build a long-acting mechanism. SZSE will define the targets, tasks and supporting direction for reforms of state-capital and state-owned enterprises, establish a special task group, and strive to make SZSE’s multi-tiered capital market a frontier platform and “new highland” to deepen reforms of state capital and SOEs and implement the Three-year Action Plan.

Second, to expand cultivation depth. SZSE will deepen professional services for central groups and local state-capital enterprises, refine “one policy for one place” and “one policy for one enterprise”, and raise the level of standardization of pre-IPO SOEs from the source. SZSE will help listed SOEs realize asset integration through market-based approaches such as holistic listing, M&A and reorganization. SZSE will speed up supply of innovative products, optimize the ETF product system in key fields such as SOE reforms, and advance the implementation and regular issuance of pilot programs of state-owned infrastructure publicly offered REITs.

Third, to improve basic systems. SZSE will optimize market functions and positioning, actively prepare for the reform of the registration-based IPO system in the whole market, and support quality mixed ownership enterprises under the pilot reform project in getting listed and obtaining financing. SZSE will improve basic systems such as M&A and reorganization, refinancing, acquisition, share lessening, equity incentive, employee stock ownership, assist listed SOEs in using capital market instruments to implement mixed ownership reform, and promote market-based allocation of production factors such as property rights, capital, technology and talent. SZSE will refine the issuance and review procedures for fixed income products, and improve the review, issuance and listing efficiency for products issued by quality SOEs.

Fourth, to promote quality transformation. Taking the implementation of the special action plan for corporate governance as an opportunity, SZSE will deepen cooperation with the State-owned Assets Supervision and Administration Commission (SASAC) and local state-owned assets supervision departments, advance full coverage of inclusion of Party building in the articles of association, and take solid steps to improve the governance level of listed SOEs. SZSE will support and guide SOEs with more than 50% shares held by state-owned shareholders in introducing strategic investors with a shareholding ratio of 5% or more as active shareholders to participate in corporate governance. SZSE will actively assist state-capital enterprises in employing diversified channels such as delisting, M&A, restructuring and bankruptcy reorganization to realize market-based clearing of “zombie enterprises”. SZSE will keep a close watch on the “critical minority”, enhance their compliance awareness and reverence, and dig deep in classified regulation, scientific regulation, professional regulation and continuous regulation.

Fifth, to deepen connecting service. SZSE will improve regular visiting and communication, enrich the content and form of training, have a deep understanding of the trends and service requirements of the reform of SOEs, and continue to upgrade regulatory services.

Next, SZSE will earnestly practice the principles of “system building, non-intervention, and zero tolerance” and the working requirements of standing in awe of the market, rule of law, professionalism and risks and pooling the efforts of all sides for the development of the capital market. SZSE will make it the top priority of the regulatory and service work to improve the quality of SZSE-listed companies, deepen institutional reform, enhance main responsibilities of regulation, and optimize services. SZSE will build itself into a “quality innovation capital center and world-class exchange” in all respects, and promote the high-quality coordinated development of SOEs and private economy.