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| Central SOEs to Tighten Stock Investment Monitoring |
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The Chinese government has instructed large state-owned enterprises (SOEs) directly controlled by the central government to establish special departments for their stock investment. A circular issued by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) said all SOEs directly controlled by the central government are prohibited from stock dealing under personal accounts. "SOEs directly controlled by the central government should enhance management and supervision of high-risk investment in financial derivatives," the circular said. SOEs should aim their dealings in futures, options or other financial derivatives at hedging risks and fixing costs, instead of speculation, it said. SOE investors should closely monitor the market so as to strictly control high-risk and fluctuating investment, it said. SASAC chairman Li Rongrong said earlier that the SASAC would improve supervision of central SOEs' investment in high-risk products and establish a responsibility system for heavy economic losses. Central SOEs should neither invest blindly in high-risk investment -- such as stocks and financial derivatives -- nor shun them, said Li at a seminar. In 2004, the state-owned China Aviation Oil ( Since the beginning of this year, when (Xinhua News Agency November 15, 2006)
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