On September 3, the "Senior Seminar on State-owned Enterprise Reform and Yuchai's Innovation Practice", organized by China Economic System Reform, was held at Beijing Friendship Hotel.  

Seminar scene 

The seminar noted 2011 marks the opening of the "twelfth five-year" period, summarizing the construction achievements and reform experience in the "eleventh five-year" period and better serving the development of the "twelfth five-year" period is a concrete reflection of deepening reform, transforming the mode of economic development and implementing the scientific outlook on development. The seminar is aimed at exploring the existing problems of state-owned enterprise reform, seeking the future direction of state-owned enterprise reform, and dissecting the systematic breakthrough and achievements of innovation practice in cases of state-owned enterprise reform, thus creating a space and atmosphere in favor of exploration of state-owned enterpriser reform. 

Founded in 1951, through six decades' development, Yuchai has become one of China's leading machinery manufacturers. Particularly, in the "eleventh five-year" period, Yuchai conducted reform, made bold innovation, renovated its organizational structure, system and mechanism, and created the influential "phenomenon of Yuchai". Yuchai's new objective is to build an enterprise with annual sales revenues of RMB 100 billion by the end of the "twelfth five-year" period. As a model Chinese enterprise in exploration of state-owned enterprise reform, thoroughly summarizing Yuchai's reform exploration is of great importance to China's state-owned enterprise reform, the industrial development of China's machinery industry and Yuchai's future development. 

Guest speakers present at the seminar included Gao Shangquan, honorary chairman of China Society of Economic Reform (CSER) and famous economist; Yan Ping, chairman of Yuchai Group; Zhang Xiaoyu, vice chairman of China Machinery Industry Federation; Wang Qiang, deputy director of the Department of Economic System Reform of the National Development and Reform Commission (NDRC); Xuan Jiajun, deputy mayor of Yulin; Chang Xiuze, professor of the Academy of Macroeconomic Research, NDRC; Li Jun, chief of the Division of Enterprise Development of the Bureau of Enterprise Reform of NDRC; and Xing Min, vice chairman of China Internal Combustion Engine Industry Association. Also present the seminar were more than 20 media outlets, including the Xinhua News Agency, China News Service, CCTV, Economic Daily, China Economic Net, Sina, Guangming Daily, Workers Daily and China Industry News, as well as over 100 persons from all walks of life concerned about state-owned enterprise reform.  

Yan speaks 

Zhang Changming, vice chairman of CSER, presided over the seminar. Ma Ke, president of China Economic System Reform, delivered the opening speech on behalf of the organizer.  

Zhang presides over the seminar 

Ma noted the phenomenon that state-owned capital is injected while private capital is withdrawn has aroused great concern over this problem. Apart from some state-owned enterprises concerning the national economy and security, others should accelerate the establishment of the modern enterprise system, thus going up to the level of equity diversification. Only in this way will Chinese state-owned enterprises become main market players, increase core technical level, own core technology, participate in international competition and gain a foothold on the international stage.  

Ma delivers the opening speech 

Yuchai has made some breakthrough and remarkable achievements in state-owned enterprise reform, but there is still great potential for exploration. Through dissecting Yuchai's reform cases, the seminar offered constructive and perspective opinions on existing problems and systematic constraints to promote the constant deepening of China's state-owned enterprise reform. 

At the keynote speech entitled the Reflection on Yuchai's Innovation Practice in "Eleventh Five-Year" Reform, Yan summarized the keys to Yuchai's fast development in the "eleventh five-year" period: as a state-owned enterprise, Yuchai communicated with the government smoothly; cultivated professionals and advanced technical innovation; strengthened the main product chain and built several industry clusters; perfected systems and mechanisms and consolidated the management foundation; and built and advocated the concept of "Green Development & Harmony Win-win". 

The "eleventh five-year" period is a critical period for Yuchai to adjust its development strategy, perfect its industrial layout and create a new situation of development. Over the five years, Yuchai has weathered the "triple pressure" of the international financial crisis, state governance and control, and malignant industry price competition. However, through efforts such as industry layout adjustment, industrial resource integration and industry structure optimization, Yuchai has enhanced its enterprise structure gradually, increased business benefit steadily and improved survivability continuously. 

Centering on state-owned enterprise reform and Yuchai's reform and innovation practice, attendees voiced impressive opinions. Gao considered Yuchai's state-owned enterprise reform to be of great significance to the whole country. If all other state-owned enterprises can follow suite, China will be promising. He noted Yuchai's state-owned enterprise reform and innovative practice has three contexts: Yuchai's good situation has relied on the reform and opening up; Yuchai, without monopoly interests, has survived and developed through competition; Yuchai is not in a large city, therefore, Yuchai's developments have not come easy. However, it is a heavy task for Yuchai to become a domestically leading and world-famous enterprise with annual sales revenues of RMB 100 billion in the "twelfth five-year" period, to which reform is the key. Either the government or the enterprise should press ahead with reform with greatest courage and resolution.  

Gao speaks 

According to Zhang, Yuchai has kept pace with every stage and process of the reform and opening up and remained in the forefront to turn such a small city of Yulin into a larger and stronger one. It has played a role of bellwether in advancing China's internal combustion engine industry and construction machinery industry, as well as other relevant industries.   

Zhang speaks 

Wang noted, over the three decades since the launch of the reform and opening up, state-owned enterprise reform has made great strides and achievements. However, scientific and harmonious development lacks system guarantee, reform of some key fields is ineffective and needs to be furthered. For example, reform of monopolized industries has made slow progress. The construction of the modern enterprise system is stagnant, the system of state-owned asset management is yet to be further improved, and value maintenance and appreciation of state-owned assets needs to be improved.  

Wang speaks 

According to Li, the brilliant achievements Yuchai has made through bold exploration in the "eleventh five-year" period can provide enlightenment for the development of state-owned enterprises in five aspects: firstly, the advanced culture and development concept is the key to Yuchai's fast development, and pioneers continuous industrial development; secondly, consolidating the foundation of internal management has laid the groundwork for the enterprise's accelerated development; thirdly, reform has injected strong power into the company's continuous development; fourthly, persisting in technological innovation has fostered the core competitiveness of the enterprise; lastly, Yuchai values brand cultivation with the aim of becoming a first-class enterprise in the industry, and has produced major impact in the world.  

Li speaks 

At the seminar, Xuan, on behalf of the Yulin Municipal Government, pledged that the government will continue to support Yuchai in development and restructuring.  

Xuan speaks 

Chang, who has long been engaged in enterprise monopoly and property right reform research, judged that the important content and links of state-owned enterprise reform are ineffective, which is reflected in four aspects: firstly, state-owned capital is distributed excessively extensive in competitive fields, and the situation has been worsening in recent years; secondly, the governance structure of state-owned enterprises is yet to be improved; thirdly, no substantial progress has been made in the reform of state-owned monopolized industries, especially monopolized sectors like railway and salt, government intervention and manipulation of economic life is severe in some aspects; lastly, impediment forces in vested interest groups have disturbed state-owned enterprise reform greatly and worryingly. 

Xing noted Yuchai has impact on the overall enterprise system and mechanism reform in the internal combustion engine industry. Yuchai's development shows an enterprise must constantly change its means of production, adjust its industry structure, values independent innovation and talent training in order to grow continuously.  

Xing speaks 

Yuan Xucheng, chief editor of China Economic System Reform, on behalf of the organizer, summarized the seminar. He noted, whether in enterprise system reform or in internal mechanism management innovation, Yuchai has set a good example for Chinese local state-owned enterprises, and has served as a vivid model in China's state-owned enterprise reform, especially local state-owned enterprise reform.  

Yuan speaks 

According to Yuan, the existing prominent problems of China's state-owned enterprise reform are most enterprises have conducted or are conducting reforms of modern enterprise system by establishing boards of directors and boards of supervisors. As a matter of fact, due to the restraint of the wholly state-owned system, real and complete modern corporate governance has not been accomplished. 

Growing into a model enterprise in the machinery industry from the 1950s, Yuchai has conducted intensive effective reforms in such aspects as industry orientation, talent management and mode of group management and control, restructured the enterprise effectively, increased business benefit steadily and promoted the healthy and fast development of business sectors such as engine and construction machinery. Through dissecting Yuchai's reform cases, the seminar offered constructive and perspective opinions on existing problems and systematic constraints, and is of positive significance to promoting the constant deepening of China's state-owned enterprise reform and real commercial reform of corporate governance featuring equity diversification. 

(Text by Mei Changfu/Zou Hui, photo by Mei Changfu)