金融英语阅读：SOEs overseas assets examined
China will release regulations aimed at reinforcing its supervision of overseas assets owned by central State-owned enterprises (SOEs) after several cases of companies suffering huge losses, a business newspaper reported Wednesday."We will definitely release a set of policies and regulations to carry out surveillance of overseas assets of these SOEs," Huang Shuhe, deputy director of the Supervision and Administration Commission for State-owned Assets (SACSA) of the State Council, told the 21st Century Business Herald in a recent interview. Huang did not specify a date for its release.
SACSA has been examining the overseas assets of major SOEs since 2009.
According to SACSA, 108 central SOEs had set up more than 5,900 companies and institutions abroad by 2009, with total overseas assets coming to $600 billion, accounting for under one fifth of their total assets, which was $3.15 trillion. The profits they made overseas accounted for 37.7 percent of total profits last year.
Meanwhile, the overseas assets of central SOEs increased by 27.1 percent last year, higher than the average growth rate of their total assets.
However, the threat of losses still hangs over the majority of SOEs, especially after moves overseas were accelerated since 2008, a chief legal advisor of an SOE who declined to be named told the paper.
China Railway Construction was found to have lost over $600 million in a light rail project in Saudi Arabia, according to a statement released by the enterprise in October. Known cases of overseas losses were just the tip of the iceberg, the newspaper learned from an internal SACSA meeting.
In order to facilitate overseas investment, senior officials of some SOEs were allowed to hold shares and invest on behalf of companies in the late 1970s. That practice continues Thursday, creating security risks to state assets and disputes over property rights.
"It is possible for officials to transfer state assets into overseas companies by means of internal integration," Wan Jun, a researcher at the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, said.
Other acts causing major losses of State-owned overseas assets include high-risk investments, embezzlement by officials, hiring wrong foreign employees and negligence in protecting intellectual property rights and trademarks. In 2004, China Aviation Oil suffered losses of $550 million after investing in crude oil futures.
SACSA should establish an open platform for SOEs to share investment information, and provide supporting policies to investors, Wan suggested.
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