In this round of SOEs reform, the government is striving to realize the reform goals of eliminating oversized and bloated state-owned enterprises as they have often overstretched their business resulting in the long standing issue of unusually low return of investment despite their abundant resources.

COFCO Corporation is just yet another example of a state-owned enterprise with terrible performance which explains why there is an immediate need to ensure that the SOEs become leaner and healthier.

The research team at ANBOUND Consulting is of the view that the one of the important cause is that the SOEs have been reckless in the merger and acquisition, which has again highlighted the importance of reforming the SOEs system. The country is in dire need to reform the SOEs through the model of mutual fund and to pursue the reform pathway by switching from management of the enterprises to management of assets.