China state-owned enterprises to support emerging sectors

China’s state-owned enterprises (SOEs) will actively support emerging industries and accelerate the modernisation of traditional ones to drive economic growth in 2025, the country’s top State-owned assets regulator has said.

Yuan Ye, vice-chairman of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), said the government will encourage central SOEs to drive progress in core as well as emerging technologies, and actively take on major science and technology projects.

Strategic emerging industries in China include sectors such as energy-saving and environmental protection, next-generation information technology, biotechnology, high-end equipment manufacturing, new energy, advanced materials and electric vehicles, the SASAC said.

Yuan said that “central SOEs will be urged to focus on fundamental research with clear goals and work toward mastering and developing more innovative technologies”.

In 2024, the total assets of central SOEs exceeded 90 trillion yuan ($12.28 trillion), a year-on-year increase of 5.9%, while their total profits reached 2.6 trillion yuan, data from the SASAC showed.

Meanwhile, central SOEs invested 2.7 trillion yuan in strategic emerging industries, up 21.8% on a yearly basis.

Lin Qingmiao, head of the SASAC’s bureau of enterprise reform, said the government’s key focus will be on the restructuring and integration of central SOEs, in order to further promote the optimization of the State-owned economy’s structural adjustment going forward.

“We will speed up the allocation of State capital to critical industries related to national security and the lifeline of national economy, public services, emergency response capabilities, public welfare and strategic emerging industries,” said Lin.

“Faced with growing external challenges and uncertainties, it is crucial that SOEs bolster market-oriented applied basic research, improve technological foresight, diversify strategies and gain mastery over more ‘core technologies’,” said Zhou Lisha, a researcher at the Institute for State-owned Enterprises, which is part of Tsinghua University in Beijing.

“Once breakthroughs are achieved in basic research and original innovation, companies are able to reshape industries and market competition, leading to a fundamental transformation in productivity,” said Zhou.

Strengthening innovation capabilities is key for SOEs to effectively compete with established competitors globally, Zhou added.

 New government policies to boost private economy

China’s latest push to bolster the growth of its private-sector economy is expected to shore up business confidence, stabilise market expectations and revitalise the growth of the world’s second-largest economy amid challenges and external uncertainties, say experts and company executives.

They noted that the country has sent a clear signal that it is determined to boost the high-quality development of the private economy through rolling out targeted measures to deal with the difficulties and issues faced by private enterprises.

Their comments came as President Xi Jinping attended a recent symposium on private enterprises in Beijing and delivered a speech, after listening to entrepreneurs.

Zhou Maohua, an analyst at China Everbright Bank, said: “The private sector is a vital force in advancing Chinese modernisation, and it plays an increasingly significant role in stabilising economic growth, expanding employment and bolstering technological innovation.”

Zhou said that a series of supportive measures, which have been introduced to tackle prominent problems facing private enterprises and to improve the business environment, are crucial for boosting confidence and stabilising the expectations of private enterprises.

He noted that the country’s efforts to promote the development of the private sector will be conducive to creating a more stable, transparent and predictable business environment, motivating private enterprises to beef up investment in research and development, and achieving technological breakthrough.

Liu Dian, a researcher at Fudan University’s China Institute, said Xi’s meeting with private entrepreneurs sent a strong signal to the outside world that China attaches great significance to the private economy and is committed to bolstering its high-quality development.