Breaking the ice again after nearly ten years: The Measures for the Management of the Definition of Functions of Central State-Owned Enterprises are about to be issued.

A reshaping of the “identity” and “mission” of hundreds of trillions of yuan in state-owned assets is quietly moving into its final critical stage. Sources close to the core of the state-owned assets regulator told us exclusively that a 《Administrative Measures for the Definition of Central Government Enterprises’ Functions》（hereinafter referred to as the “Measures”），designed to fill gaps in the state-owned assets regulatory system and mechanisms, is expected to be officially issued soon. Nearly a decade has passed since the completion of the last round of work on defining and categorizing the functions of central government enterprises. Unlike the prior classification plan, whose main purpose was to “segregate tracks,” the core of the Measures that is set to be issued is to address a deeper problem: when central government-owned enterprises are required to balance both security and efficiency, how exactly should we scientifically and accurately measure the value of a central government-owned enterprise? How should the strategic value it creates—value that cannot be directly reflected through the income statement—earn its proper “legal standing” within the regulatory framework? A state-owned assets official involved in the discussion of the Measures candidly told Economic Observer that, under the current assessment system, there has long been a structural conflict when dealing with public-welfare-type enterprises. This “structural conflict” simultaneously requires central government-owned enterprises to do business that makes money and to do business that does not. With the introduction of the new Measures, for the first time at the level of departmental regulations, this stalemate will be broken, and “the method for calculating the value added of state-owned enterprises” will be further refined in the later stage. This could have far-reaching impacts on investment decisions of central government enterprises, assessment orientations, and even the way ledgers are presented. (Economic Observer)