1. Jia Xiaoliang Bureau of Enterprise Reform, SASAC May 19, 2005
Framework of the Supervision of SOEs by SASAC of the State Council and Its Relationship with Other Organs
Jia Xiaoliang
Bureau of Enterprise Reform, SASAC
May 19, 2005

2. Framework of the Supervision of SOEs by SASAC of the State Council
Enterprise chief Management
SOA Supervisory & Administration
Critical SOA Mnagaement
SOEs
SASAC

3. Supervisory targets and scope of SASAC
SOEs (solely state-owned companies)
Supervisory targets and scope of SASAC
State holding enterprises (companies)
SOA in state participating companies

4. Designating directors/supervisors to the participated co.
Directors/supervisors sent by the holding company; recommending top managers
Designating directors/supervisors to the participated co.
Appointing/dismissing leaders of SOEs
Suggesting the appointing/dismissing of leaders of SOEs
Appointing/dismissing or suggesting the appointing/dismissing of enterprise’s leaders
The mechanism of selection and employment
Annual assessmemt
The mechanism of encouragement and constraint
Salary and rewards/punishments
Enterprises
The system for assessment of operational performance
Assessment of operational performance during the term of office
Administration of enterprise’s leaders

5. Administration of key events
Check and approval of restructuring and system reforming schemes and corporate charter
Determining the dividing, incorporation, bankruptcy and merging, dissolution, capital increase and liabilities
Designating shareholder representatives and directors
Determining the transference of state-owned property right
Approving key events relating to sub-enterprises of importance
Organizing and coordinating the merging and bankruptcy and the staffing efforts
Setting down the enterprise’s distribution system and adjusting the overall level of wage allocation
Authorizing the operation of SOA
Responsibilities for the maintenance or addition of SOA value

6. Administration of SOA
Responsible for operational and administrative issues such as enterprise’s assets, definition of property right, registration of property right, assets evaluation and supervision, check-up of assets and determination of funds, assets statistics and overall evaluation etc.; reconciling dispute in property right
Supervising and administrating transaction of property right, promoting reasonable circulation and preventing losses of SOA
Fulfilling duties of the financer in such aspects as returns on SOA, planning of critical investment and financing, and development strategy and planning etc. according to the state’s industrial policies
Other critical issues involving assets disposal which shall be approved by SASAC

7. Supervision of SOA
Designating board of supervisors to the financed enterprise according to Regulations on Board of Supervisors
Supervising the financial accounting of the financed enterprise to maintain the financer’s rights and benefits
Establishing the systems of accounting, auditing, enterprise’s legal adviser and democratic supervision by the employees inside the enterprise
The enterprise regularly reports its financial standing, production and operation and the maintenance or addition of SOA value to SASAC

8. Supervision of SOEs by SASAC of the State Council and Its Relationship with Other Organs
SASAC fulfills duties of the financer with SOA
The government provides administrative management and formulates the state’s industrial policies
Regulations on System Reform of SOEs
Measures on the Transference of State-owned Property Right
Measures on the Assessment of Enterprise’s Operators
Macrocontrol
Special audit by National Audit Office of China
SOEs