Aug. 21 (Bloomberg) -- Government-appointed executives at China’s state-owned enterprises will be replaced by private-sector managers as reform of the companies gathers speed, the South China Morning Post reported.
New managers at the so-called SOEs will be recruited from outside government and will be paid in line with international standards, the paper said, citing an Aug. 18 speech by President Xi Jinping. Government-appointed officials at the SOEs will probably join the board of directors, and their salaries will be cut by as much as 50 percent, the Post said.
Xi said China needs to speed the management reform of the SOEs, and approved a seven-year overhaul, the paper said.
The reform is to address public discontent over the ambiguous status of top SOE managers, particularly those in charge of the so-called central enterprises directly under the State Council, the paper said.
China’s reform of state-owned enterprises was broadly outlined after a Communist Party plenum in November. The State-owned Assets Supervision and Administration Commission, which manages the country’s biggest SOEs, last month designated four of them to participate in a trial of the new management reforms.
Most of the current top executives at SOEs carry a vice-ministerial or ministerial-level rank that comes with perks and privileges, with many paid several times more than their fellow government officials, the paper reported.
The more than 100 companies directly controlled by the central government accounted for a quarter of industrial output in 2011, according to a report by Fan Gang, head of the National Institute of Economic Research and a former academic member of the monetary policy committee of the People’s Bank of China.
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