Top news of the week:

• SOEs ramp up reform to better fulfill the three-year action plan

  December 20, 2021

  The central state-owned enterprises (SOE) have taken a series of measures to promote strategic restructuring and business integration this year, Hao Peng, chairman of the State-owned Assets Supervision and Administration Commission (SASAC), said. Meanwhile, China’s central SOEs have promoted in-depth business integration this year and will continue such efforts next year to fully achieve the goals outlined by a three-year action plan (2020-22) guiding SOEs to deepen reform, better adapt to market-oriented norms and ramp up mixed-ownership efforts actively and steadily.

• China urges real estate project acquisitions to aid struggling developers

  December 21, 2021

  The People’s Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission (CBIRC) recently issued a notice to financial institutions, urging large private and state-owned property companies to acquire real estate projects from troubled developers to reduce risks caused by mounting debt which may destabilize the economy. In addition, the authority also urged the institutions to provide services for M&A loans in a prudent and orderly manner, increase support for bond financing, actively provide advisory services for M&A financing, improve the efficiency of M&A services, strengthen risk management, and establish a reporting and public disclosure mechanism.

• Off-campus tutoring institutions marks remarkable decline in number

  December 22, 2021

  On December 21, China’s Ministry of Education says that the number of offline and online off-campus training institutions decreases by 83.8% and 84.1%, respectively. As China’s latest policy reform in basic education, which was meant to reduce burdens of students and parents, took place in the past months, China’s curriculum-based tutoring business was about to be wiped out which forced related listed companies to transform to other business models. According to the Ministry of Education, more than 90% of students completed their written assignments within the prescribed time, and 91.9% of students voluntarily participated in after-school services. In addition, 97.3% of parents were satisfied with the move aimed to reduce students’ excessive academic burden.

• Chinese lawmakers review legal amendments to improve corporate governance

  December 23, 2021

  On 20 December, Chinese lawmakers started to review a draft revision of the country’s Company Law to improve corporate governance and operations. The draft revision has been submitted to the ongoing session of the Standing Committee of the National People’s Congress (NPC), the top legislature, for deliberation. The revision is necessary for deepening SOE reform because it stipulates the Communist Party’s leadership over state-owned enterprises (SOEs) and improves rules on state-funded companies with enhancing property rights protection and facilitating the sound development of the capital market.

• Tencent sells JD.com, other investee companies under suspicion

  On 23 December, Tencent announced that it would distribute about 460 million JD.com shares to Tencent shareholders as interim dividends. The industry believes that under the background of anti-monopoly policy, after Tencent “dumps” its JD.com shares, the company will next sell its stakes in Meituan-Dianping, Pinduoduo and Kuaishou. Tencent, which has “slimmed down” its investment landscape, will also face a new round of evaluation on its main business in the secondary market.