China's new State assets watchdog is ready to meet the challenge posed by the reform of the State assets management system, ensuring better use of the resources and helping State-owned enterprises (SOEs) run more efficiently, its head said yesterday.

With all its personnel in place a nd relevant regulations in the pipeline, the newly established State-owned Assets Supervision and Administration Commission of the State Council (SASAC) will move on to implement its function as an investor on behalf of the State to supervise the operation of major SOEs, evaluate their performance and push forward State economic restructuring, commission director Li Rongrong told a Beijing press conference.

The launch of the one-month-old body, which has subordinate local State asset management offices across the country, formally separates the public management functions from those of the investors in the SOEs, which used to be combined and caused confusion in management.

The commission now directly supervises 196 central enterprises that had 6.9 trillion yuan (US$833.3 billion) of State-owned assets as of the end of 2002.

The commission, acting as an investor, will send a supervisory board to these enterprises, see to the maintenance and appreciation of the value of State assets, appoint enterprise executives and check their work according to relevant evaluation systems, said Li.

"But we will ensure autonomous decision-making of the enterprises in daily management and will not interfere in that. The top priority now is to accelerate the drawing up of regulations to ensure that our work can be conducted in an orderly fashion and on a sound legal basis," he said.

The State Council has approved the provisional Regulation for the Supervision and Management of Corporate State-owned Assets last week. The regulation, as a guideline clarifying the functions of the State asset management agencies and their relationship with relevant enterprises, is expected to be formally enacted within the month, said Li.

More relevant rules will come out too.

China had 174,000 SOEs by the end of 2002, but the majority of them will be monitored by the local State asset management agencies.

Some local governments have already started selling local State assets to private investors.

Ensuring the transparency of the process and avoiding the loss of State resources are key issues that have aroused concerns from the public and experts alike.

"The State asset management agencies should dispose of the assets in a transparent, fair and open way,"said Lin Yifu, director of the China Centre for Economic Research at Peking University.

A system to avoid the loss of such assets should be established as soon as possible, he said.

These resources, if valued properly, can provide crucial funds for the social security sector, he said.(China Daily)