Decision of the Standing Committee of the National People’s Congress on Strengthening the Supervision of State-owned Asset Management

(Adopted at the 24th Meeting of the Standing Committee of the Thirteenth National People’s Congress on December 26, 2020)

The following decision is made in accordance with the Constitution and relevant laws in order to implement the decisions and plans of the Central Committee of the Communist Party of China on establishing the system whereby the State Council reports to the Standing Committee of the National People’s Congress on state-owned asset management; to strengthen the people’s congresses’ supervision of state-owned assets; to modernize the system and capacity for state-owned asset governance; and to ensure that state-owned assets better serve economic and social development, ensure and improve people’s well-being, protect the environment, and ensure that state organs and public institutions perform their duties economically and efficiently.

1. With a view to implementing the Central Committee of the Communist Party of China’s decisions and plans of state-owned asset management and governance and with a focus on the supervision of management of state-owned assets by governments, the Standing Committee of the National People’s Congress shall remain committed to law-based, appropriate and exhaustive supervision of state-owned assets, stay problem-oriented, and carry out comprehensive and effective performance of duties to supervise state-owned assets in accordance with the law.

The Standing Committee of the National People’s Congress shall annually listen to and deliberate on the State Council’s reports on state-owned asset management, which is the basic way to perform the people’s congresses’ duties to supervise state-owned assets, and shall comprehensively use law implementation inspection, questioning, inquiry, investigation of specific issues and other statutory supervision methods. The Standing Committee shall make a five-year plan for state-owned asset supervision for its term of office and implement such plan through its annual work plans for state-owned asset supervision.

2. The State Council shall make annual reports on state-owned asset management, containing both a comprehensive report and a special report. The comprehensive report on the management of state-owned assets shall comprehensively and accurately reflect the basic situation of all types of state-owned assets and the management thereof with a focus on the layout and structure of the state-owned sector of the economy, deepening the reform of state-owned enterprises, the allocation and distribution of state-owned assets of government administrative offices and public institutions, the condition, protection and use of state-owned natural resource assets, the safety and efficient use of state-owned assets, the outstanding problems in state-owned asset management, strengthening state-owned asset management and preventing the loss of state-owned assets. The special report shall highlight priorities based on the nature and management objectives of various types of state-owned assets and in light of the key issues deliberated by the Standing Committee of the National People’s Congress, reflecting the management and the management effectiveness of the state-owned assets including state-owned assets of enterprises (excluding financial enterprises), state-owned assets of financial enterprises, state-owned assets of government administrative offices and public institutions, and state-owned natural resource assets, as well as related problems and arrangements for improvement.

Improving the statement system of various types of state-owned assets shall be made an important part of the reports. The availability and changes of state-owned assets shall be reported based on their nature and characteristics and in terms of value and material objects. Statements on state-owned assets of enterprises (excluding financial enterprises), of financial enterprises, and of government administrative offices and public institutions shall be detailed to industries, and statements of state-owned assets of the Central Government shall be prepared and presented by enterprises, departments and entities. A sound evaluation index system reflecting the management characteristics of different categories of state-owned assets shall be put in place to provide a comprehensive, objective and accurate reflection of the management and its effectiveness.

The accounting of state-owned assets shall be standardized in accordance with the national unified accounting system and a relevant sound statistical survey system shall be developed to meet the needs of state-owned asset management reform. The preparation of government balance sheets and other accounting statements and natural resource balance sheets shall be accelerated. The recording of comprehensive government financial reports based on accrual accounting shall be strengthened and coordinated with the reports of state-owned asset management.

The audit institution of the State Council shall deepen the full coverage of audits in accordance with the requirements of the Central Committee of the Communist Party of China. They shall increase state-owned asset audits in accordance with the principles of authenticity, lawfulness, and effectiveness and based on their statutory duties. A special audit report shall be worked out as a sub-report of the annual audit report on the central budget execution and other financial revenues and expenditures submitted by the State Council to the Standing Committee of the National People’s Congress.

3. The Standing Committee of the National People’s Congress may invite deputies to the National People’s Congress to participate in its investigation and research on specific subjects about the annual reports on state-owned asset management. Results of the investigation and research shall be reported to the Standing Committee of the National People’s Congress.

A sound evaluation index system for state-owned asset supervision from the people’s congresses shall be established in light of the management objectives of various types of state-owned assets and the key issues deliberated by the Standing Committee of the National People’s Congress. Performance evaluation of state-owned asset management shall be carried out based on relevant evaluation indexes and a third-party evaluation mechanism shall be established based on explorations.

The relevant special committees of the National People’s Congress shall assume the responsibility of preliminary deliberations of the reports of the State Council on state-owned asset management. Thirty days before the meeting of the Standing Committee of the National People’s Congress, the Financial and Economic Affairs Committee of the National People’s Congress shall carry out preliminary deliberations and produce results of these deliberations alone or in conjunction with other relevant special committees.

The Budgetary Affairs Commission of the Standing Committee of the National People’s Congress shall undertake the specific work of state-owned asset supervision by the people’s congresses and assist the Financial and Economic Affairs Committee and other relevant special committees to undertake the work related to preliminary deliberations. Forty-five days before the meeting of the Standing Committee of the National People’s Congress, the Budgetary Affairs Commission shall solicit the opinions and suggestions from deputies to the National People’s Congress and listen to and analyze the main content of the reports briefed by relevant departments of the State Council and raise opinions.

4. In deliberating the reports on state-owned asset management and supervising state-owned assets, the Standing Committee of the National People’s Congress shall focus on the following:

(1) the implementation of the principles, policies, and major decisions and plans of the Central Committee of the Communist Party of China for state-owned asset management and the reform and development of state-owned enterprises;

(2) the implementation of relevant laws;

(3) the implementation of the relevant deliberation opinions and resolutions of the Standing Committee of the National People’s Congress;

(4) the reform and improvement of the management system of all kinds of state-owned assets;

(5) the role of state-owned assets of enterprises (excluding financial enterprises) and of financial enterprises in serving national strategies and helping the state-owned sector become competitive, creative, and risk-resilient and exercise a greater level of influence and control over the economy;

(6) the role of state-owned assets of government administrative offices and public institutions in ensuring that state organs and public institutions perform their duties economically and efficiently, and enhancing accessibility and equal access to basic public services;

(7) the role of state-owned natural resource assets in supporting economic and social development, improving the environment, and reaching obligatory targets for the protection and effective utilization of natural resources, protection of the environment, and energy conservation and emissions reduction;

(8) state capital preservation and appreciation, the prevention of loss of state-owned assets, and earnings management;

(9) the rectification of the problems identified in auditing; and

(10) other important situations related to state-owned asset management.

The Standing Committee of the National People’s Congress shall conduct questioning about specific issues when it listens to and deliberates on the comprehensive report on state-owned asset management in the year before the expiration of its term of office. It may also conduct questioning about specific issues when it listens to and deliberates on special reports in other years as needed. With respect to the problems in state-owned asset management, the Standing Committee of the National People’s Congress may conduct inquiry about or investigation into specific issues in accordance with the law and make resolutions in accordance with the outcomes of deliberation and supervision according to the law.

5. The State Council shall establish a sound rectification and accountability mechanism. It shall list problems to be rectified and for which accountability is to be ascertained in accordance with the deliberation opinions, reports of investigation and research on specific subjects and audit reports. It shall rectify the problems by categories and hold those violating laws and regulations accountable in accordance with the law. Rectification and accountability results as well as reports on the study and handling of the deliberation opinions of the Standing Committee of the National People’s Congress shall be reported to the Standing Committee of the National People’s Congress which may listen to and deliberate on the reports. The problems identified in auditing shall be rectified and reported in accordance with relevant regulations.

A sound mechanism shall be established step by step for tracking and supervising rectification and accountability. The Standing Committee of the National People’s Congress shall establish a list of outstanding problems and typical cases under supervision, and relevant special committees, the Budgetary Affairs Commission, etc., shall carry out specific tracking and supervision work to ensure problems are rectified. An effective mechanism for coordinating state-owned asset supervision from the people’s congresses and state supervision shall be established to strengthen information sharing and work contacts, and promote rectification and accountability.

6. The management system for budgets of state capital operations shall be improved to ensure that these budgets play a better role in coordinating, restraining, supporting and guaranteeing the overall layout, investment and operations, and return management of state capital. The working mechanism for coordinating asset management with budget management shall be improved, so as to comprehensively reflect the use of budgetary funds for relevant state-owned assets such as infrastructure, government investment funds, and public-private partnership projects.

Problems reflected in and comments based on reports and supervision of state-owned asset management shall be important bases for the budget review of the next year and important reference for the reporting on review results.

7. Working bodies of the Standing Committee of the National People’s Congress shall, in a timely manner, make known to the deputies to the National People’s Congress and the public the five-year plans for state-owned asset supervision, reports on state-owned asset management and the deliberation opinions therefrom, reports on investigation and research on specific subjects and the preliminary deliberation opinions of relevant special committees, and reports of the State Council on study and handling of the deliberation opinions, on rectification and accountability, and on the implementation of resolutions in accordance with the Law of the People’s Republic of China on Supervision by the Standing Committees of the People’s Congresses at All Levels and other laws. The State Council and its departments shall disclose the state-owned asset statements of the state, departments, and entities as required in a timely manner, except those that should not be disclosed in accordance with the law.

8. Relevant departments of the State Council shall establish an exhaustive platform for sharing state-owned asset information to achieve connectivity for relevant departments and entities. They shall regularly submit state-owned asset data and information to the Budgetary Affairs Commission through the National People’s Congress online budget and state-owned asset supervision system. They shall also provide information and materials on state-owned asset management not included in the online data in a timely manner as required by supervision.

The Budgetary Affairs Commission shall improve work contact with relevant departments of the State Council, strengthen supervision and coordination, and collect relevant information and report it to relevant special committees and the Standing Committee of the National People’s Congress in a timely manner.

The Budgetary Affairs Commission shall offer suggestions regarding the typical problems and cases identified through supervision of the Standing Committee of the National People’s Congress or by the general public. The Budgetary Affairs Commission may investigate state-owned asset management of relevant departments and entities with the approval of the Council of Chairpersons of the Standing Committee of the National People’s Congress, and governments at all levels and relevant departments and entities shall actively provide assistance and cooperation.

9. The standing committees of local people’s congresses at or above the county level shall establish sound systems for supervision of state-owned asset management based on their respective actual circumstances and by following this Decision mutatis mutandis, strengthen supervision and perform people’s congresses’ duties to supervise state-owned assets in accordance with the law.