SASAC
Functions and Legal Basis of SASAC,
the State Council
May 19, 2005
Outline:
Establishment of SASAC
Duties of SASAC
Legal basis for SASAC to fulfill its duties
I Establishment of SASAC
Basic path of reform
Expanded autonomy in
management
Profits to be turned in are
changed into tax
Contract system
Pilot project for joint stock
system
Switching mechanism and
establishing system
Establishing modern
enterprise system
Prominent issues in
reform
State-owned property right
Clear ownership
Definite rights and
obligations
Rigorous protection
Smooth transfer
Financer (representative) in
place
Approaches for the reform of
SOA and SOEs
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Basic systems
Realization forms
Strategic framework
Corporate governance
Opened and activated
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the 14th National Congress of
CPC
the Fourth Plenary Session of
the 15th Central Committee
of CPC
the 16th National Congress of
CPC
the Second Plenary Session of
the 16th Central Committee
of CPC
the Third Plenary Session of
the 16th Central Committee
of CPC
Ideas for the reform of SOA system
Under the precondition of sticking to the principle of being state-owned...,
establishing a system for SOA administration in which the central
government and local governments respectively represent the state to fulfill
duties of the financer and enjoy the owner’s rights and benefits, rights,
obligations and responsibilities are unified, and administration of assets,
personnel and issues is combined. For large SOEs, infrastructure and critical
natural resources etc. relating to lifelines of the national economy and
national security, the central government will represent the state to fulfill
duties of the financer. For other SOAs, local governments will represent the
state to fulfill duties of the financer. The central government and provincial
and municipal governments establish SOA administrative organs.
Establishment:
According to the scheme for reform of organs under the State
Council which was passed on 1st Conference of the 10th National
Congress, the State-owned Assets Supervision and Administration
Commission of the State Council (SASAC) was established in
March 2003 and this is the first special organ under the State
Council established by the central government since the
foundation of PRC to represent the state to fulfill duties of the
financer.
Local SASACs are established in provincial (autonomous region
or municipality directly under the central government) and
municipal levels.
Nature:
SASAC is an organ authorized by the State Council to fulfill duties of the
financer. According to the principle that the function of public
administration shall be separated from the function of the owner, SASAC
is specially designed to assume the responsibility of supervising and
administrating SOA. SASAC, neither a governmental administrative organ
to provide public administration of enterprises in the society nor an
ordinary enterprise or institution, is a special organ of ministerial level
directly under the State Council.
New SOA system
Gov.
Special org.
SASAC of the
State Council
Provincial gov.
Provincial
SASAC
Local gov.
Local SASAC
The financed
enterprises of
central gov. level
(172)
The financed
enterprise of
provincial level
The financed
enterprise of
local level
Operational non-financial SOA
in SOEs, state holding and
participating enterprises
the State
Council
Enterprise’s SOA
Objective
Key indicators of central
enterprises in 2004
 Total assets: RMB 0.919 trillion, up 12.3% from previous year
 Net assets: RMB 0.395 trillion, up 11.8% from previous year
 Owner’s equity: RMB 0.320 trillion, up 11.55% from previous
year
 Return rate of net assets: 8.9%, up 2.9% from previous year
 Average return rate of total assets: 6.5%, up 1.5% from
previous year
 Sales income: RMB 0.55 trillion, up 25.8% from previous
year
 Profits realized: RBM 478.46 billion, up 57.6% from previous
year
 Taxes and duties turned in: RMB 428.56 billion, up 27% from
previous year
 All-personnel labor productivity: RMB 155,000/person-year,
improved by RMB 31,000
II Duties of SASAC
Economic adjustment
Market supervision
Right to earnings
Critical decisions
Financer
Government
Selecting managers
Social management
In place
Public service
Enterprise—profit
Duties:
1.
2.
3.
The Second Plenary
Session of the 16th
Central Committee of
CPC
6 functions
SASAC’s “3-fixes”
scheme
6 functions
Regulation (No.378)
6 functions
Article 13
1.
2.
3.
4.
5.
6.
Fulfilling duties of the financer in the financed
enterprise to maintain the owner’s rights and
benefits in accordance with laws and
administrative regulations such as Company Law
etc.;
Guiding and promoting the reform and
restructuring of SOEs and state holding
enterprises;
Designating board of supervisors as stipulated;
Appointing/dismissing and evaluating chief of the
financed enterprise according to legal procedures
and awarding or punishing the chief according to
the result of evaluation;
Supervising the maintenance or addition of SOA
value by the enterprise by statistical and auditing
means;
Fulfilling other duties of the financer and handling
other issues as specified by the government of
equivalent level.
In addition to duties said above, SASAC of the
State Council can formulate regulations and
systems for supervision and administration of the
enterprise’s SOA.
1.
Obligations: 2.
Article 14 of the
Regulation
3.
4.
5.
6.
Promoting reasonable circulation and optimized
allocation of SOA and facilitating the adjustment
of state-owned economy layout and structure;
Maintaining and improving the control force and
competitiveness of state-owned economies in
sectors relating to lifelines of the national
economy and national security to enhance overall
quality of state-owned economies;
Exploring effective systems and modes for the
operation of the enterprise’s SOA, strengthening
the supervision and administration of the
enterprise’s SOA, promoting the maintenance of
enterprise value and preventing the loss of SOA;
Guiding and promoting SOEs and state holding
enterprises to establish modern enterprise system,
sophisticate the structure of governance by legal
person and facilitate the modernization of
administration;
Respecting and maintaining the right of SOEs
and state holding enterprises for autonomous
management, maintaining their legal rights and
benefits according to law, and promoting their
legal operation and management;
Providing SOEs and state holding enterprises
with guidance and coordination to tackle
difficulties and problems in reform and
development.
III Legal basis for SASAC to
fulfill its duties
Laws
Administrative regulations
Departmental rules
Regulatory documents
Key laws and regulations:
Laws:
 Company Law (1993,
1999)
 Enterprise Law (1988)
Regulations:
 Interim Regulations on
the Supervision and
Administration of
Enterprises’ Stateowned Assets
Overall:
Currently there are
totally 257 laws,
administrative
regulations, rules and
regulatory documents
relating to the
supervision and
administration of SOA.
Rules and regulatory
documents:
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The Decree of SASAC No.1: Measures on Inventorying of Property and
Auditing of Capital for SOEs
The Decree of SASAC No.2: Interim Measures on the Assessment of
Operating Accomplishments by Chiefs of Central Enterprises
The Decree of SASAC No.3: Interim Measures on the Administration of
Transference of Enterprise’s Property Right
The Decree of SASAC No.4: Measures on Accounting and Reporting of
Enterprise’s SOA
The Decree of SASAC No.5: Measures on the Reporting and Administration
of Financial Final Accounting for Central Enterprises
The Decree of SASAC No.6: Measures on the Administration of Legal
Advisers of SOEs
The Decree of SASAC No.7: Interim Measures on the Administration of
Economic Responsibilities of Central Enterprises
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The Decree of SASAC No.8: Interim Measures on the Administration of Internal
Auditing of Central Enterprises
The Decree of SASAC No.9: Interim Measures on the Confirmation of the
Maintenance or Addition of the Value of Enterprise’s Government Capital
The Decree of SASAC No.10: Administrative Measures on the Planning of
Development Strategy for Central Enterprises
The Decree of SASACNo.11: Interim Measures on the Administration of Legal
Dispute for Central Enterprises
Guiding Opinions on the Normalization of Ownership Reform for SOEs
Opinions on Strengthening Party Construction Efforts in Central Enterprises
Interim Regulations on the Transference of Enterprise’s State-owned Property
Right to the Management
Laws/regulations being drafted
or revised:
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State-owned Assets Law
Property Right Law
Company Law (revised)
Bankruptcy Law
Interim Measures on Boar of Supervisors of SOEs
Administrative Regulations on Budgeting, Operation and
Management of Government Capital
 Administrative Regulations on Authorized Operation of
Central Enterprises
Principles for fulfillment of duties
according to law
 The principle of separated
 The principle of legally
prescribed functions
 The principle of legislation in
advance
 The principle of legal behaviors
 The principle of legal procedures
 The principle of unified rights
and obligations
 The principle of supervision and
check
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government and capital
The principle of separated
governmental function and
enterprise management
The principle of “3unifications”
The principle of “3combinations”
The principle of “2 separated
powers”
The principle of no direct
intervention
The principle of
sophisticated system
SASAC
Thank You！
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