China to implement tighter management of SOE’s overseas assets

BEIJING - The results of an investigation into some of China’s biggest SOEs has revealed that the risk of potential malpractice in the management of overseas assets “remains unacceptably strong”, according to the disciplinary watchdog, the Central Commission for Disciplinary Inspection.

The results of the investigation will likely form the foundation behind efforts to introduce stricter levels of corporate governance and more effective management of China’s overseas interests.

Observers say the situation is of serious concern for Beijing’s “Belt and Road Initiative” – the strategy to revive Asia’s ancient Silk Road and maritime Silk Road - which incorporates massive amounts of infrastructure and communications development and will lead to a greater number of overseas projects conducted by SOEs in sectors such as energy, transportation, aviation and telecommunications.

Officials at China’s State-owned Assets Supervision and Administration Commission said the decision to tighten controls “illustrates the government’s determination to address existing problems and to create favourable conditions to roll out the Belt and Road strategy”.