BEIJING - China's major State-owned enterprises will complete corporate governance reform by the end of this year, in an effort to overhaul inefficient companies.

The reform targets SOEs supervised by the central government excluding financial and cultural firms, according to an action plan released by the State Council late last month.

A contemporary corporate system aims to separate government administration from business operations by restructuring them into limited companies. As a result, SOEs can function as efficiently as other businesses. Corporate governance reform is one of the key goals of SOE reform.

According to the plan, the reform will proceed with disciplined operations when handling SOE ownership structure and corporate debts.

For central SOEs that become wholly State-owned enterprises, registered assets will be calculated according to the net asset value of the previous year.

Those that become enterprises with diverse equity structures will go through specific procedures, including asset verification, appraisal and financial audit.

In addition, the mixed-ownership reform, which diversifies the shareholding structure of SOEs, will take off in the second half of this year.

The reform will introduce private or foreign investment in the shareholding of SOEs. Oil and gas companies will be at the forefront.

To make SOEs leaner and healthier, the State-owned Assets Supervision and Administration Commission also plans to reduce the number of central SOEs to under 100 this year, with coal, steel and heavy equipment manufacturing industries in the spotlight.

"Reducing the number itself is not the goal of restructuring. We care more about what the reforms will actually bring," said Peng Huagang, deputy secretary-general of SASAC. "We are not seeking abrupt change. We look for a chain reaction."

Xinhua