China is moving to de-politicise management of its lumbering state-owned enterprises by letting corporate boards, rather than the government, appoint senior executives.
Overhauling SOEs, which account for about 20 per cent of economic output but are more indebted and less profitable than privately-owned counterparts, is a central component of the government’s efforts to revamp an economy growing at its slowest pace in 25 years.
Top SOE managers are appointed by the Communist party’s personnel department, with input from the State-owned Assets Supervision and Administration Commission, the SOE watchdog. The most important SOE managers have party rank equivalent to cabinet ministers or vice-ministers and often place political or policy considerations over corporate efficiency.