In 2015, large-scale enterprises, or those with annual revenues above 20 million yuan ($3 million), generated about 6.4 trillion yuan in revenue, down about 2.3 percent, media reports said. They all face the same issues: limited financing, a hefty tax burden and a shortage of personnel.
Analysts suggested that proposals such as lowering corporate tax rates and reducing logistics costs could be on the agenda, according to cs.com.cn.
SOE reform
The country will also launch more pilot programs for State-owned enterprise (SOE) reform in 2016, in line with the central government's schedule for testing 10 items of SOE reforms, according to the Supervision and Administration Commission (SASAC) of the State Council, China's cabinet.
The SOE reform will proceed at a faster pace in 2016. It will cover many areas, including the investment of State-owned capital, the consolidation and closure of "zombie enterprises" and mergers and reorganizations of SOEs, according to media reports.
Three to five enterprises will be chosen for a pilot program for SOE mergers and reorganizations, according to SASAC.
The two companies in the current program are China Chengtong Holdings Group and China Reform Holdings Corp, media reports said.
More SOEs will be chosen based on the requirements for the reforms, Zhang Xiwu, deputy head of the SASAC, was quoted as saying in the statement.
The country will promote mixed-ownership pilots in many vital sectors, including power, petroleum, natural gas, railways, telecommunications and the defense industry, the Xinhua News Agency reported on Thursday.
Non-State-owned capital investment is planned to be brought into the pilots to create management structures and operation mechanisms that are favorable to the participation of market competition, the report said.
The first batch of companies for this pilot program will be announced in the first half of 2016, and the pilots will start in the second half of this year.
The SASAC is also scheduled to set up a unified information disclosure platform for SOEs, with the aim to provide information to SOEs, as well as offer the public access to the information, Xinhua said. It is expected to regulate the management of SOEs to prevent the loss of State-owned assets.
Financial risk prevention
The State Council asked relative departments across the country to set up and improve a long-term mechanism firmly based on the bottom line that any systematic and regional financial risk should be warded off, according to a statement released on February 4.
Economic, administrative and legal measures should be applied to deal with cases to secure stable social development, the statement noted.
Meanwhile, public education should be strengthened and the development of private investment and financing should be regulated.
Given the current complicated domestic economic environment, it is important to strengthen supervision over these sectors, cs.com.cn noted.
Some private financial institutions are involved in illegal financing and their products are not covered by regulations, which would cause regional risks amid the sluggish economic environment, the report said, citing opinions of Li Xunlei, chief economist at Haitong Securities.
Therefore, the government will undertake severe regulations to control and punish illegal financing, Li said.
The domestic banking system is under great risk pressure, the foreign exchange market and the cross-border capital flow burden pose big risks, the report said, citing banking experts. It is hard to prevent the risks with so many industries involved, all of which need a lot of attention.
Economic reforms in 2016 will also include promoting the results of the Free Trade Zone pilot programs, advancing the construction of the "One Belt and One Road" initiative and further boosting a new round of high-level opening-up, the report said.
