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Draft revision to Law on State-Owned Assets of Enterprises reviewed to promote high-quality development

By Ren Qi | chinadaily.com.cn | Updated: 2026-04-28 16:29
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A draft revision to the Law on State-Owned Assets of Enterprises was submitted on Monday to a standing committee session of China's top legislature for its first reading, marking the first major overhaul of the legislation since it took effect nearly 17 years ago.

The draft, submitted to the 22nd session of the 14th National People's Congress Standing Committee, aims to provide a robust legal guarantee for the deepening reform of State-owned capital and enterprises, aligning with the nation's broader push for high-quality development and Chinese modernization.

Since its implementation on May 1, 2009, the current law has laid down the foundational system for the management and supervision of State-owned assets.

As China navigates a development phase characterized by both strategic opportunities and complex, unpredictable challenges—particularly looking ahead to the 15th Five-Year Plan period (2026-30)—optimizing the legal framework of State-owned assets is of great significance to support sustained and healthy economic development.

The comprehensive draft revises 71 articles and adds 32 new ones, expanding the law to 109 articles across nine chapters.

To propel the reform of State-owned enterprises, the draft places a strong emphasis on refining the modern corporate system with Chinese characteristics. It stipulates principles of clear property rights and well-defined responsibilities, aiming to improve internal governance and establish effective incentive and constraint mechanisms.

In a dedicated section on corporate governance, it builds upon general provisions of the Company Law to encourage wholly State-owned and State-holding companies to adjust and optimize their equity structures.

In terms of refining the oversight and management framework, the draft institutionalizes successful reform experiences. It clarifies principles such as establishing a sound entrusted agency mechanism for State-owned capital, improving State capital investment and operation mechanisms, and implementing centralized and unified supervision over operational State-owned assets.

Addressing previous institutional gaps, the revised draft incorporates government investment funds into its regulatory scope, outlining principled requirements for agencies performing investor duties over these funds.

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