State-owned Assets Supervision and Administration Commission of the State Council

Origins and creation (2003)

SASAC was created in 2003 as part of a State Council restructuring that sought to clarify state ownership of major enterprises and separate government administration from enterprise management. The new body was placed directly under the State Council to exercise the state's contributor and shareholder rights in centrally administered, non-financial state-owned enterprises. Its mandate was framed the same year by the State Council's Interim Regulations on the Supervision and Management of State-Owned Assets of Enterprises, which set out the goals of preserving and increasing state capital value and excluded financial institutions from the remit. In early public briefings the first SASAC leadership described a toolkit that included executive appointments and evaluation, approval of major reorganisations, dispatch of supervisory boards to key firms, and drafting of rules on the management of state assets.

Early oversight model (2003 to 2012)

In the years after its creation SASAC put in place executive performance contracts and an appraisal system for central SOE leaders. Provisional appraisal procedures were issued in late 2003 and by October 2004 the commission reported that most central SOEs had signed responsibility contracts setting financial and governance targets for annual and term evaluation.

Board reform followed. From 2004 SASAC piloted boards of directors and strengthened the role of outside directors to improve monitoring and decision-making at group level. Seven central government-owned SOEs were chosen for the pilot program, which added boards of directors at the company level, with at least two external board members selected by SASAC. Supervisory boards dispatched on behalf of the State Council reviewed key enterprises and reported on performance and risk alongside SASAC's appraisal work. The legal base was consolidated with the 2008 law on state-owned assets in enterprises, which codified the state owner system and the division of central and local contributor functions. During this period fiscal arrangements for state-capital income were clarified. The state capital operating budget was administered through the Ministry of Finance, while SASAC continued to develop owner-oversight tools around appointments, boards and performance contracts.

Reform acceleration (2013 to 2016)