Xi Jinping orders state enterprises to drive industrial transformation

Chinese President Xi Jinping has instructed central state-owned enterprises (SOEs) to serve as the cornerstone of national development, calling on them to drive industrial transformation and secure critical technologies during China’s next phase of growth.

Speaking at a meeting of central SOE leaders held in Beijing on Monday and Tuesday, Xi stated, “Central SOEs must fully understand the responsibilities and missions they shoulder and better serve the overall priorities of the party and the state,” according to Xinhua.

This directive comes as China navigates a crucial transition period: the final year of its 14th Five-Year Plan and the preparatory phase for the 15th Five-Year Plan, which will run from 2026 to 2030. During this time, Beijing aims to advance its development amidst rising uncertainties, including geopolitical tensions, the ongoing trade war with the US, and the technology race.

Xi ordered the enterprises to focus on their core businesses, enhance their core competitiveness, and achieve breakthroughs in critical technologies.

He also called for improved management capabilities to transform state companies into world-class organizations and safeguard their development.

State-owned enterprises and state capital, which Beijing has pledged to strengthen over the next five years, form the backbone of China’s socio-economic structure, particularly in sectors related to national strategy and public livelihood.

As of the end of 2024, the assets of China’s central state-owned enterprises stood at 91 trillion yuan ($13 trillion), representing an average annual increase of 7.3% since 2021.

According to September data from the State-owned Assets Supervision and Administration Commission (Sasac), these enterprises spend more than 15 trillion yuan annually, directly supporting nearly 2 million upstream and downstream businesses.

Premier Li Qiang, who attended the meeting, echoed Xi’s remarks and outlined several specific requirements.

In addition to providing strong support for advancing major infrastructure projects and renovating older ones, Li stated that “central state-owned enterprises should advance new infrastructure projects in a pioneering manner, but at an appropriate pace.”

Li emphasized that these organizations must take a leading role in building self-sufficient and resilient supply chains to ensure energy security.

According to Sasac data, central state-owned enterprises supplied 80% of China’s crude oil, 70% of its natural gas, and 60% of its electricity generation between 2021 and 2025.

Li also urged these enterprises to develop new and future-oriented industries based on their core business areas.

The Premier noted that to play a fundamental role in China’s push for high-level scientific and technological independence, central state-owned enterprises must strengthen applied basic research and provide better key technologies.

According to Sasac, central state-owned enterprises have invested 8.6 trillion yuan in strategic emerging industries since 2021, with an average annual increase of over 20%. These efforts have helped establish world-class industry clusters in fields such as information technology, new energy, advanced materials, and high-end equipment.

Highlighting the importance of disciplined corporate governance, Xi and Li pledged to tighten supervision and resolutely combat corruption.