In the boom of the construction of the Hainan Free Trade Port, the China International Consumer Products Expo has become an important platform to showcase China's consumer goods and attract global investors. In order to further help state-owned assets and state-owned enterprises (SOEs) to carry out first-class value creation actions and play a greater role in the construction of the Free Trade Port, KPMG China released the "Key to Benchmarking First-class Value Creation: The Key to Improving State-owned Assets and SOEs" during the Consumer Expo.
As KPMG's first series of major publications on SOE reform to be released in 2024, the report focuses on the "Seven Focuses" of the SASAC's Value Creation Actions from the perspective of benchmarking first-class, and provides an in-depth analysis of the necessity, urgency and implementation path of deepening reform based on a sound value creation system, in-depth case studies and unique insights, revealing the important role of state-owned assets and state-owned enterprises in globalization and market competition.
Looking back on the journey of building a world-class enterprise, Jiang Liqin, Head of Client & Business Development, KPMG China and Head of State-owned Assets and State-owned Enterprises Consulting, said that between 2013 and 2025, the government issued a series of policies, and in this context, state-owned assets and state-owned enterprises (SOEs) have gradually risen through continuous self-innovation and development through deepening reforms and optimizing the layout of state-owned capital, and have achieved a magnificent transformation from scale expansion to high-quality development. In this process, the competitiveness of state-owned enterprises has been significantly improved, and their profitability has continued to increase, and at the same time, the awareness of social responsibility of state-owned enterprises has also been continuously enhanced, making positive contributions to the country's economic development and social progress.
This report is not only a review and summary of the development process of state-owned assets and state-owned enterprises, but also provides us with a new perspective to observe and interpret the reform of state-owned assets and state-owned enterprises.
01
State-owned assets and state-owned enterprises should respond to first-class standards
Enhance value creation
In the current economic context, deepening the reform of state-owned assets and state-owned enterprises is not only the need to enhance the core competitiveness of state-owned enterprises, but also the key to promoting the high-quality development of the entire economic system. The report argues that value creation should be placed at the heart of reform, which means that SOEs must abandon their old business models and embrace more market-oriented and innovative operating strategies.
According to the report, state-owned central enterprises should start from the first-class benchmarking, closely follow the specific action measures proposed by the State-owned Assets Supervision and Administration Commission in the "Value Creation Action", and aim at world-class enterprises and advanced enterprises in the industry in the six major areas of industry leadership, digital and intelligent transformation, organizational control, financial system, risk compliance and capital platform layout optimization, and ensure that the value creation action achieves substantial results by optimizing the industrial and business layout, promoting digital transformation, and improving the governance structure and organizational control mechanism.
The report pointed out that state-owned enterprises need to enhance their core functions and enhance their core competitiveness, gain accurate insight into market demand and competition, continue to strengthen their ability to create value, and continuously improve the quality and value of products and services with the help of technological innovation and management innovation, enhance the brand value and market competitiveness of enterprises, transform value creation into considerable economic and social benefits, and contribute to social development.
Qiao Mo, National Responsible Partner of KPMG China's State-owned Assets and State-owned Enterprises Reform and Development Centre and a member of the Steering Committee of KPMG Research Institute, believes that when formulating strategic goals and planning business development, state-owned enterprises should take value creation as the cornerstone, clarify the goals and directions of value creation by continuously optimizing their own capital platform layout and portfolio, give full play to their leading role in the industrial chain, and promote the upgrading and optimization of the industrial chain. Advanced technologies such as artificial intelligence promote the digital transformation of enterprises and improve the intelligence level of enterprises;
In addition, state-owned enterprises also need to strengthen the risk compliance protection system, build an efficient and safe financial system, and establish a scientific performance evaluation system. In the process of the construction of the free trade port, state-owned enterprises should make full use of the policy advantages and market opportunities of the free trade port, continuously improve their competitiveness through innovation-driven, deepening reform, market expansion and other measures, gradually narrow the gap with world-class enterprises, and inject new impetus into the construction of the free trade port.
02
State-owned enterprises should unleash globalization and
Huge potential in the market competition
At present, in the face of complex changes in the domestic and international economic situation, state-owned assets and state-owned enterprises, as an important pillar of China's economy, shoulder important tasks such as leading development, stabilizing the economy and improving competitiveness. The report pointed out that state-owned enterprises should take world-class enterprises as benchmarks, strengthen their leading role in the industrial chain, promote industrial transformation and upgrading, and at the same time use advanced technologies such as big data and artificial intelligence to carry out digital and intelligent transformation, establish a scientific organization and control system, improve the financial management system, strengthen the construction of risk compliance system, optimize the layout and portfolio of capital platforms, and comprehensively enhance their own strength and competitiveness to achieve sustainable development.
The reform of state-owned assets and state-owned enterprises plays an important role in helping the construction of the free trade port. Second, the reform of state-owned assets and state-owned enterprises will help promote industrial upgrading and innovative development, and introduce more high-quality and high-value-added projects and enterprises to the Hainan Free Trade Port. At the first China International Consumer Goods Expo, Hainan's local state-owned enterprises successfully attracted the attention of a large number of exhibitors and visitors with their excellent product quality and unique experience design. These state-owned enterprises have continued to forge ahead in the wave of reform and opening up, and have demonstrated their important role in the construction of the free trade port through their product strategy and distinctive brand experience.
In terms of digital transformation, the report emphasizes that state-owned assets and state-owned enterprises should carry out top-level design of digital transformation and accelerate the deep integration of advanced technologies and businesses. Enhance the core competitiveness of enterprises through measures such as application scenario empowerment, digital platform construction, and data asset management. At the same time, we should pay attention to the risk prevention of network, data, and information infrastructure to ensure security and stability in the process of digital transformation.
In terms of organizational control, state-owned assets and state-owned enterprises should improve the governance structure, optimize the organizational system and management and control mode, formulate scientific and reasonable management and control principles and a system of collection and decentralization, improve the human resource management system, carry out the reform of the talent development system and mechanism, optimize the salary and incentive system, and attract and retain outstanding talents. In addition, the construction and improvement of the innovation system is also the key, and it is necessary to innovate the benefit distribution and incentive system to stimulate the innovation potential of employees.
In terms of financial management, the report points out that it is necessary to build an efficient and safe financial system, enhance the ability of financial group control and intensive operation, optimize the allocation of financial resources, further promote the construction of the system, improve the efficiency of capital operation, reduce capital costs, prevent capital risks, and ensure the financial safety and stability of enterprises.
In terms of risk control management and sustainable development, the report recommends strengthening the monitoring and early warning, identification, assessment, research and judgment of various risks, promoting the sustainable development of ESG, establishing an ESG indicator system, improving data collection, evaluation and analysis, tracking management, and intelligent reporting systems, so as to enhance corporate social responsibility and sustainable development capabilities.
In view of the optimization of the layout and capital operation planning of state-owned central enterprises in the capital market, the report proposes to strengthen the top-level design of capital operation of state-owned enterprises, improve the governance system of listed companies, and optimize the post-investment management and layout of overseas projects. The report suggests that state-owned central enterprises should start from the overall strategic positioning of state-owned enterprises, give full play to the advantages of market-oriented resource integration, increase investment in strategic emerging industries, increase strategic restructuring and professional integration, improve the governance system of listed companies, and improve the level of corporate governance. It is also necessary to strengthen planning and implementation for overseas business layout, operation and optimization of investment and financing systems to enhance the global competitiveness of enterprises. In addition, the reformed state-owned assets and state-owned enterprises system will be more open and transparent, which is conducive to creating an international and law-based business environment, thereby attracting more foreign investment into the free trade port.
Qiao Mo said that after more than six years of construction, a framework focusing on trade and investment, cross-border capital flow, free and convenient transportation of people in and out, and safe and orderly flow of data has been initially established, and the growth rate of many economic indicators in Hainan in 2023 ranks among the top in the country, and the economic development achievements are relatively significant. Hainan's local state-owned assets and state-owned enterprises have assumed very important responsibilities in this process, especially in opening up and using corresponding policies to do a good job in trade and capital flows. He believes that in the next stage, Hainan's local state-owned assets and state-owned enterprises will play a leading and leading role in connecting with the global market.
According to a KPMG China official, deepening reform is not only a slogan or a direction, but also needs to be supported by concrete actions and measures. In the context of China's economic transformation and upgrading and high-quality development, the reform of state-owned assets and state-owned enterprises, as a key part of it, is becoming more and more important. Against the backdrop of the construction of the Hainan Free Trade Port and China's consumption upgrading, KPMG China's report series on "Deepening the Reform of State-owned Assets and State-owned Enterprises and Promoting High-quality Development" fully demonstrates its deep participation in and strong promotion of the deepening reform of state-owned assets and state-owned enterprises. It not only allows us to see the huge potential of state-owned assets and state-owned enterprises in globalization and market competition, but also points out the direction for us to promote the high-quality development of China's economy. With the joint efforts of the government and enterprises, state-owned assets and state-owned enterprises are expected to achieve the goal of benchmarking first-class value creation and make greater contributions to the prosperity and stability of China's economy.
Source: China Daily