China's mixed ownership reform advances against headwinds

(Xinhua) Updated: 2014-06-16 11:14

BEIJING - As a priority on China's reform agenda, diversifying the ownership of the country's State-owned enterprises (SOEs) is making progress although the road ahead may be bumpy.

IT engineers for digital map service provider Navinfo have become much busier these days after the SOE invited in Tencent Holdings in May by selling an 11.28-percent stake to the private IT titan for 1.17 billion yuan ($187.6 million).

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The two companies are working on a smart in-vehicle navigation system with more accurate navigation and rich location-based services.

The tie-up of Navinfo, a subsidiary of the China Aerospace Science and Technology Corporation, and Tencent marked the first step taken by an SOE to open up to private capital in order to forge mixed ownership.

Such reform is high on China's to-do list for 2014 as the country aims to invigorate generally torpid SOEs and provide fair chances to different market entities.

"China will loosen grips on all the competitive sectors and set up an arena in which private investors can fairly compete," said the National Development and Reform Commission (NDRC), China's top economic planner, in a statement last month.

The commission later released a first batch of 80 programs to solicit private investment. They mainly involve transport infrastructure, new energy projects and telecommunication facilities.

As one of the country's three telecom operators, China Telecom has also taken action. The company is working with Amazon and Japanese auto maker Infiniti among others to incubate 68 innovative projects.

The State Development and Investment Corporation (SDIC) went even further. Nearly 80 percent of the company's subsidiaries have diversified their ownership by drawing in private investment so far.