In China's huge economy, the two types of state-owned enterprises (SOEs) and central SOEs are often silly and indistinguishable. So what exactly are the differences between them, and what are the connotations of each?
Interpretation of the concept of state-owned enterprises and central enterprises
State-owned enterprises refer to enterprises that are fully funded or controlled by the state, and are mainly responsible for the economic tasks specified by the state. State-owned enterprises can be divided into two categories: ** enterprises and local enterprises, corresponding to state-owned enterprises at the national and local levels. Central enterprises, also known as ** enterprises, are enterprises directly subordinate to the State-owned Assets Supervision and Administration Commission or other ** departments. As the core strength of state-owned enterprises, central enterprises have strong economic strength and market competitiveness.
The difference between state-owned enterprises and central enterprises
State-owned enterprises with differences in management levels: Taking China's power grid enterprises as an example, the State Grid is the first enterprise, and its management system is divided into four levels, including headquarters, provincial level, prefecture-level and county-level. Local power grid enterprises are under the management of local ** relevant departments. Central Enterprise: China Petroleum & Chemical Corporation (Sinopec) is a state-owned enterprise with a relatively simplified management level, mainly including two levels: headquarters and subsidiaries. Different SOEs in the field of operation: Taking China State Construction as an example, it is a state-owned enterprise that is mainly responsible for national infrastructure construction tasks, such as highways, high-speed railways, airports, etc. State-owned enterprises: China State Construction is also a state-owned enterprise, which operates in a wide range of fields, including not only infrastructure construction, but also real estate development, municipal engineering, landscaping, etc. Distinction between responsible entities of state-owned enterprises: The main responsible entities of state-owned enterprises are the board of directors and the management team, which are responsible for the daily operation and management of the enterprise. At the same time, state-owned enterprises also need to follow the first-class macro-control policy and assume certain social responsibilities. Central enterprises: The main body of responsibility of central enterprises is the State-owned Assets Supervision and Administration Commission or other departments, which are responsible for supervising, guiding and assessing the business behavior of central enterprises. While realizing economic benefits, central enterprises also need to undertake national strategic tasks and play a leading role in the national team. Differences in the progress of reform of state-owned enterprises: The reform process of local state-owned enterprises is relatively slow, but it is gradually deepening. In Shandong Province, for example, the province has actively promoted the reform of state-owned enterprises (SOEs) and improved their efficiency through measures such as corporate governance structure reform, mixed ownership reform, and employee stock ownership. Central enterprises: The reform process of central enterprises is relatively fast, and they have become the leaders of the reform of state-owned enterprises. Sinopec Corporation has launched a pilot mixed-ownership reform to introduce private capital and improve corporate efficiency.
Synergy and development of state-owned enterprises and central enterprises
Resource sharing: State-owned enterprises and central enterprises have complementary advantages in terms of resources, technology, and talents. For example, local state-owned enterprises have strong geographical advantages in infrastructure construction, while central enterprises can use their national layout to achieve optimal allocation of resources. Industrial synergy: SOEs and central SOEs can support each other in the adjustment of industrial structure. For example, central enterprises have a leading position in energy, transportation and other fields, which can drive the development of local state-owned enterprises-related industries and achieve industrial synergy. Innovative development: State-owned enterprises and central enterprises can learn from each other in terms of innovation and development. Central enterprises have advantages in technological innovation and management innovation, and can share experience with local state-owned enterprises to jointly promote the transformation and upgrading of state-owned enterprises. 