Notice of the Ministry of Finance on Implementing the Guiding Opinions of the Central Committee of the Communist Party of China and The State Council on Improving the Management of State-owned Financial Capital

(Finance [2018] No. 87)

Department of Finance (Bureau) of Provinces, autonomous regions, municipalities directly under the Central Government, and cities separately listed under the Plan, and Bureau of Finance of Xinjiang Production and Construction Corps:

 In the report to the 19th National Congress of the Communist Party of China, it is clearly proposed to improve the management system of various state-owned assets, reform the authorized operation system of state-owned capital, promote the preservation and appreciation of state-owned capital, and effectively prevent the loss of state-owned assets. On June 30, the CPC Central Committee and The State Council issued the Guiding Opinions on Improving the Management of State-owned Financial Capital (hereinafter referred to as the Guiding Opinions), which is a major decision and deployment of the CPC Central Committee and The State Council to strengthen the supervision of state-owned assets and improve the management of state-owned financial capital, and is of landmark significance. In order to comprehensively and thoroughly implement the Guiding Opinions, the relevant matters are hereby notified as follows.

I. Deeply understand the significance of improving the management of state-owned financial capital

State-owned financial capital is an important guarantee for promoting national modernization and safeguarding national financial security, and an important material and political foundation for the development of the cause of our Party and country. State-owned financial institutions are an important pillar for serving the real economy, preventing and controlling financial risks, and deepening financial reform.  To strengthen and improve the management of state-owned financial capital, we must put the improvement of the management system of state-owned financial capital in a prominent position. The responsibilities of state-owned financial capital donors should be centralized and unified by one department, rather than controlling the water in nine buckets and managing each other in one share. It is necessary to implement unified authorized management of state-owned financial capital, strengthen the whole-process supervision of state-owned property rights, implement a full-caliber reporting system, and take specific measures to prevent internal and external cooperation.

 It is the fundamental compliance of state-owned financial capital management in the new era. To promote this reform is conducive to improving the efficiency of state-owned financial capital, promoting the preservation and appreciation of value, improving the vitality, competitiveness and sustainable development capacity of state-owned financial institutions, promoting the modernization of the financial governance system and governance capacity, preventing and controlling financial risks and ensuring national financial security, and upholding the leadership of the Party and strengthening Party building.

The Guiding Opinions make it clear that the financial departments shall centrally and uniformly perform the duties of the funders of state-owned financial capital, and the Ministry of Finance shall be responsible for formulating the national unified rules and regulations for the management of state-owned financial capital, which is the full trust of the Party Central Committee and The State Council for the financial departments to perform their duties, and it is also the major responsibility and glorious mission of the financial departments. Financial departments at all levels should improve the political position, enhance the "four consciousness", fully understand the significance of the introduction of the "Guiding Opinions", further enhance the sense of responsibility, mission and urgency, and effectively unify the thinking and action to the central requirements. It is necessary to deeply study the spirit of the document and accurately grasp the essence of the content as an important prerequisite for good implementation, and expand the breadth and depth of learning. It should be closely combined with the study and implementation of the 19th National Congress of the Party and the spirit of the National Financial Work Conference, and closely combined with the reform tasks and outstanding problems to be solved in the region and the unit to improve state-owned financial capital management, and strive to transform the results of learning into conscious action and vivid practice of deepening reform.

Second, accurately grasp and improve the reform of state-owned financial capital management

The Guiding Opinions focus on the problems and obstacles restricting the management of state-owned financial capital, adhere to the five basic principles of serving the overall situation, unified management, clear powers and responsibilities, problem-oriented and strengthening the leadership of the Party, in order to establish and improve the management of state-owned financial capital "four beams and eight pillars", straighten out the management system of state-owned financial capital, and enhance the vitality and control of state-owned financial institutions. To promote the preservation and appreciation of state-owned financial capital, to better achieve the three basic tasks of serving the real economy, preventing and controlling financial risks, and deepening financial reform, and to implement coordinated policies, is the deepening and development of state-owned capital management reform in the financial field in the new era, and is a programmatic document for state-owned financial capital management. Financial departments at all levels should deeply understand the spirit and essence of the Guiding Opinions and accurately grasp the core essentials of reform.

(1) Accurately grasp the scope of state-owned financial capital. The Guiding Opinions make it clear that state-owned financial capital refers to the capital and rights and interests formed by the State and its authorized investment entities directly or indirectly in financial institutions. The capital and rights and interests formed by the financial management department or the financial institutions established, operated and operated mainly relying on the credit of the state and supported by the power of the state, although the state has no investment, shall be included in the management of state-owned financial capital under the premise of complying with the provisions of the law. When managing state-owned financial capital, financial departments at all levels should accurately grasp the management boundary to ensure that the supervision of financial state-owned capital is not absent and not offside.

(2) Conscientiously implement the main responsibilities of state-owned financial capital contributors. The Guiding Opinions clarify the system of authorization and delegation of state-owned financial capital, state-owned financial capital belongs to the state, that is, to the whole people, The State Council exercises the ownership of state-owned financial capital on behalf of the State, The State Council and local people's governments perform the functions and responsibilities of investors on behalf of the State in accordance with laws and regulations, and financial departments at all levels, in accordance with the authorization of the people's government at the same level, Centralized and unified performance of the responsibilities of state-owned financial capital donors. Where the financial departments have not yet performed their duties as contributors of state-owned financial capital or have not performed their duties properly, they must actively follow up and effectively perform their duties as required. Some local conditions are not mature, can be classified to entrust other departments, institutions to manage state-owned financial capital, the implementation of entrusted management of the place to establish a transition period, while the financial department to ensure that the identity of the investor, management rules remain unchanged, management responsibilities remain unchanged, the full scope of reporting responsibilities remain unchanged.

3. Steadily promote the centralized and unified management of state-owned financial capital. The "Guiding Opinions" clearly implements centralized and unified authorized management of state-owned financial capital, and compacts the management responsibility of the financial sector. In accordance with the principles of unified regulation and hierarchical management, the Ministry of Finance is responsible for formulating unified rules and regulations for the management of state-owned financial capital, and financial departments at all levels perform their duties for the management of state-owned financial capital in accordance with laws and regulations, and are responsible for organizing the implementation of basic management, operating budgets, performance assessment, and management of responsible persons' compensation. Financial departments at all levels, which perform the functions of investors, shall enjoy the rights of investors to participate in major decisions, choose managers, and enjoy benefits for relevant financial institutions in accordance with laws and regulations.

(4) Strictly implement the penetration management of state-owned financial capital. The Guidelines require that the principle of substance over form be followed, based on corporate governance and by means of property rights supervision, the capital penetration management of equity contributions of state-owned financial institutions be implemented to prevent insider control. Financial departments at all levels should implement hierarchical management responsibilities, in accordance with the principle of penetration, state-owned financial institutions at central and local levels, strengthen supervision over the implementation of macroeconomic policies such as the investment of state-owned financial capital, and strictly implement the state-owned financial capital management system. The parent company of state-owned financial institutions shall strengthen the capital penetration management of subsidiaries at all levels within the group, strictly examine the qualifications of shareholders and sources of funds, and ensure that the basic management system of state-owned financial capital is implemented at all levels.

5. Accelerating legislation on state-owned financial capital management. The "Guiding Opinions" proposed to improve the legal and regulatory system of state-owned financial capital management and consolidate the legal foundation of state-owned financial capital management. The Ministry of Finance will speed up the legislative process of the regulations on the management of state-owned financial capital, and study the establishment of a unified system of state-owned financial capital donors, so that state-owned financial capital management powers and responsibilities are legal and based on law.

6. Improve the system for managing state-owned financial capital. The Guiding Opinions clearly improve the management system of state-owned financial capital base and strengthen the management of the transfer of state-owned property rights of financial institutions. We will implement a budget management system for state-owned financial capital operations and standardize the distribution relationship between the state and state-owned financial institutions. The performance appraisal system for state-owned financial capital operations shall be strictly enforced, and the assessment shall be carried out according to classification and responsibility. We will improve the compensation management system for state-owned financial institutions. We will strengthen financial oversight of financial institutions and safeguard the rights and interests of state-owned financial capital.

(7) Implement full reporting on state-owned financial capital. The guidelines call for the establishment of a unified statistical monitoring and reporting system for state-owned financial capital, reporting to the Party Central Committee with full caliber, and reporting to the Standing Committee of the National People's Congress on the management of state-owned financial assets in accordance with regulations. Financial departments at all levels regularly report to the governments at the same levels on the management of state-owned financial capital. The report should fully reflect the total amount, investment, distribution, disposal, and returns of state-owned financial capital, as well as the reform of state-owned financial institutions, asset supervision, risk control, and compensation of senior managers.

8. Strengthen Party leadership over state-owned financial institutions. The "Guiding Opinions" stressed the need to adhere to the Party's leadership throughout the whole process of reform, put forward the "four synchronization" requirements for party building, and unify the strengthening of the Party's leadership and the improvement of corporate governance. Give full play to the role of the leadership core of the Party organization, strengthen the construction of the leadership team and talent team, and effectively implement the "two responsibilities" of comprehensively and strictly governing the Party. According to the law and regulations, we will standardize the behavior of employees of financial management departments to work in financial institutions, standardize the behavior of employees of state-owned financial institutions to work in units related to their original business after leaving their jobs, improve the avoidance system of employees of state-owned financial management departments and state-owned financial institutions, and prevent internal cooperation and interest transfer, and prevent moral hazard.

Third, we will earnestly implement all policies and measures for managing state-owned financial capital

Financial departments at all levels should earnestly strengthen the political consciousness and responsibility consciousness of implementing the Guiding Opinions, and conscientiously organize learning in light of their respective realities to ensure that all deployments are implemented in place. Financial departments at all levels should pay close attention to the local district Party committees and governments to report and study the implementation of the document, further improve the system and mechanism, optimize the management system, consolidate management responsibilities, and improve the level of management services.

1. Accelerating the improvement of the state-owned financial capital management system. Financial departments at all levels should attach great importance to, carefully organize, establish and improve the corresponding organizational leadership mechanism, strictly in accordance with the requirements of centralized and unified, full coverage of the whole process, and penetration management, effectively strengthen and improve the management of state-owned financial capital, and steadily and orderly promote various reform work. Local financial departments should promptly report to the Party committees and governments at the same level to win support. It is necessary to actively coordinate relevant departments, take effective measures to clarify the boundaries of authority and responsibility of departments, improve the authorized operation system, clarify the principal-agent relationship, and rationalize and consolidate the centralized and unified state-owned financial capital authorization management system as soon as possible. The financial departments of the provinces (autonomous regions and municipalities directly under the Central Government) and cities independently designated by the government should also speed up the formulation of work plans, schedules and road maps, and submit relevant plans to the Ministry of Finance by the end of 2018.

2. Actively implementing policies and measures for managing state-owned financial capital. Financial departments at all levels should take the initiative to implement the table, pay close attention to the implementation of the actual situation, pay close attention to the study and formulation of implementation rules and specific plans, form a supporting document framework as soon as possible, and implement the management organization system. Existing institutional measures and management systems should be sorted out, adjusted and optimized in a timely manner to ensure consistency with the central spirit. Financial departments at all levels should take the "Guiding Opinions" as the action program, constantly optimize the layout of state-owned financial capital, accelerate the establishment of the investor system, and effectively strengthen the management of state-owned financial capital base, operating budgets, performance assessment, salary management, financial supervision, statistical monitoring and analysis reports. It is necessary to comprehensively strengthen the leadership of the Party and promote the combination of capital management and party building management. It is necessary to establish a sound supervision and accountability mechanism and strictly investigate responsibilities.

3. Vigorously promote the sustained and healthy operation of state-owned financial institutions. Based on reality and taking a long-term view, we should continue to deepen the reform of the corporate shareholding system, improve the corporate governance structure, give full play to the role of equity directors, establish and improve the hierarchical management system for leading personnel, encourage state-owned financial institutions to return to their roots and focus on their main business, and effectively enhance their ability to prevent and control risks. It is necessary to strengthen internal and external oversight of state-owned financial capital, strictly examine the qualifications of shareholders and the sources of capital, strictly regulate comprehensive financial operations and the integration of industry and finance, and prohibit state-owned financial enterprises from using their financial advantages to control non-financial enterprises. State-owned financial institutions should give full play to the leading role of Party organizations, on the basis of corporate governance, and strictly require their affiliated enterprises at all levels to earnestly implement the relevant provisions on the management of state-owned financial capital. Enterprises at all levels of state-owned financial institutions should focus on their main business, effectively establish a firewall separating financial capital from industrial capital, and carry out foreign investment in accordance with law and compliance.

(4) Improve the work supervision mechanism for state-owned financial capital management. The Ministry of Finance has established and improved the supervision mechanism for the management of state-owned financial capital, and supervised and inspected the progress of the implementation of the Guiding Opinions by local financial departments and state-owned financial institutions. Local financial departments should effectively strengthen the supervision and guidance of relevant work in the region, timely and comprehensively grasp the implementation of various policies and measures, and effectively respond to new situations and new problems. We should pay attention to publicity and guidance, take the initiative to release authoritative information, solve doubts and doubts in a timely manner, and build consensus on reform. It is necessary to strengthen the monitoring, research and judgment of public opinion, actively respond to social concerns, and strive to create a good atmosphere for the whole society to understand reform, support reform, and promote reform.

The financial departments of the provinces (autonomous regions and municipalities directly under the Central Government) and cities separately listed under the Plan are requested to submit the information on the study and implementation of the Guiding Opinions to the Ministry of Finance at the end of August 2018.

Ministry of Finance

July 18, 2018