China will strengthen supervision of the overseas operations of state-owned firms and push forward efforts to cut their debt, state radio said on Wednesday, citing a cabinet meeting. The meeting, headed by Premier Li Keqiang, stressed that China must improve management and governance of state firms, create flexible and efficient market-driven operations, and give companies more autonomy in operations.
Reform of state firms made good progress this year, but some firms' "internal control systems are lacking, and some investments have relatively large risks", according to the summary of the State Council meeting. Deleveraging of state firms will continue, it added.
Beijing has made reining in corporate debt a key goal this year, while also trying to push forward reform of powerful state-owned firms. Most Chinese corporate debt is held by state firms, and recent data show some progress has been made. China's non-financial corporate debt as a proportion of gross domestic product fell to 163.4 percent in the second quarter from 165.3 percent in the first, figures published last week by the Bank of International Settlements show.
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