SOEs cast net wider to find new bosses
By Sun Min (China Daily)
Updated: 2004-06-01 08:34

Twenty-three senior management posts at 22 of the nation's large State-owned enterprises (SOEs) are expected to be opened to foreign applicants, a leading official said yesterday.

This will be the second round of the open recruitment campaign organized by the Chinese authorities to find the right people to upgrade the management of SOEs.

Li Yizhong, vice-minister of the State-owned Assets Supervision and Administration Commission (SASAC), said that the positions will be open to both domestic and foreign applicants, but each firm will be able to set their own standards.

SASAC, the organizer of this campaign, is the supervisor of around 190 major SOEs in China.

The positions will be as high as deputy general manager or chief accountant, similar to those offered in the first such recruitment campaign organized by SASAC in the second half of last year.

That round of recruitment hired seven senior managerial staff at six large SOEs.

"The new campaign has drawn on the experience of the first one and should run more smoothly," Li said yesterday at a Beijing conference.

"We are making the relevant preparations and the campaign will hopefully start in the third quarter," he said.

Li said it is still not the time to disclose the names of the 22 enterprises that will participate in the campaign, but they would range from industrial and commercial companies to transportation and construction enterprises.

The jobs should offer payments that follow labour market standards, he said. Afterwards, more SOEs would take part in similar campaigns to get the executives they want. And the positions offered in the future may be more diversified or even higher.

But the appointment of the chiefs of central SOEs, such as the general manager or president, is still made by the central government and the Central Committee of the Communist Party of China.

Many deputy general managers or similar positions are also designated in the same way, but there has been a growing trend to seek senior executives from the labour market or through public competition.

Personnel system reform in SOEs has a great strategic importance, as market reforms and growing international competition have forced the SOEs to upgrade their management and become more efficient and competitive, said Li.

If the SOEs no longer want to be training schools for foreign or domestic private firms, they have to improve the salary scheme and create more incentives to lure and maintain more personnel, he said.

The lack of incentives and the gap in salary with some private companies has made some managerial staff seek new opportunities elsewhere.

According to a SASAC survey of 53 central SOEs, since 1998, about 10 per cent of the senior executives in these enterprises have left to study overseas or work in private and foreign companies.

Moreover, about two-thirds of the senior managerial staff in the central SOEs still earn salaries that are lower than those offered to equal positions in the labour market.

To change the situation, SASAC has drawn up a three-year plan to reform the personnel system in the central SOEs, which aims to introduce market-standard incentives and payment for leading officials in the enterprises and provide them with sufficient training and a good working environment.

It also plans to introduce stock options in some high-tech companies of the central SOEs this year. Meanwhile, it has also implemented a market-oriented evaluation system for the SOE chiefs by directly linking their payment to corporate profits and returns.

"We have felt increasing pressure on our performance, but that is good," said Li Tang, a deputy general manager of China General Technology (Group) Holdings Ltd.

The company also participated in the first open recruitment campaign organized by SASAC last year and hired a deputy general manager named Han Benyi from a broadcasting company in Shaanxi.

"Han has brought us some new thinking because he is from a different business," said Li. "In the past, most of my colleagues were promoted from the same system and that may have limited our vision."

SASAC statistics also indicated that the most wanted professionals in SOEs are currently experts on the international economy, law and financial operation, those with overseas experience as well as senior technicians.

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