China’s Xi Jinping again calls for greater corporate governance at state-owned firms ahead of third plenum

Fresh comments by the president offer insight into what sort of economy-boosting reforms will be prioritised at the long-awaited gathering next month

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China’s third plenum next month will feature discussions about economic reforms. Photo: AFP

Published: 5:00pm, 12 Jun 2024

Fresh discussions by China’s top group on deepening systemic reforms offer what analysts see as a glimpse into what is on the cards for the third plenum as the long-awaited gathering for Beijing to flesh out new reform priorities draws nearer.

The Central Commission for Comprehensively Deepening Reform, headed by President Xi Jinping, convened its latest meeting on Tuesday and touched on the need to enhance China’s corporate governance system, to better protect farmers’ interests, and to cultivate a globally competitive environment for innovation, party mouthpiece Xinhua reported.

“New policies to improve governance for both state-owned enterprises and private businesses – with a renewed emphasis on clear-cut ownership nature, rights and responsibilities as well as equality for all shareholders – could be a key reform focus at the plenum in July,” said Li Jin, a deputy director with China Enterprise Reform and Development Society.

The third plenum traditionally lays out China’s reform and economic strategy for the next five to 10 years, and is often regarded as the most important of the seven party plenums held over the Central Committee’s five-year cycle. It would have usually been held last October or November, but leadership has taken more time to prepare.

At Tuesday’s meeting, Xi reportedly stressed that, to turn more state-owned enterprises (SOEs) into world-class companies, a modern corporate governance structure must be established to solidify the party’s leadership but also promote clear-cut responsibilities and a separation of government functions from corporate operations to foster effective management.

“It is essential to respect businesses as key players in business activities and to tailor modern corporate governance structures to businesses of different ownership nature and of different scales and development stages,” Xi was quoted as saying.