Chongqing - Chongqing has cut its key state-owned enterprise (SOEs) groups from 51 to 33, signaling a major push to streamline SOEs for long-term economic sustainability.

At a municipal press conference on May 27, the Chongqing State-owned Assets Supervision and Administration Commission reported the achievement of SOEs reform, which was conducted from 2023.

Zeng Jinghua, Director of the Chongqing State-owned Assets Supervision and Administration Commission, emphasized that, over the past two years, the number of legal entities under Chongqing SOEs has been reduced from 2,260 to 690. The overall loss ratio of key Chongqing SOEs has dropped from 40% to 18.6%. Key Chongqing SOEs have so far reactivated assets worth 151 billion yuan (approximately $ 20.99 billion USD) and recovered 59.5 billion yuan in funds.

Chongqing Machinery and Electronics Holding Group is one of Chongqing's key state-owned enterprises. (Photo/CME)

SOEs have long played a vital role in China’s economic system, not only providing public services and strategic support but also driving industrial growth. However, Chongqing SOEs faced several challenges: excessive in number, scattered in layout, small in scale, and weak in capacity. 

According to Zeng, many of which were inefficient, long-term loss-making, or even “zombie enterprises.” The overall loss ratio of Chongqing SOEs had remained around 40% for years, posing a significant barrier to growth.

To address these issues, the reform began with loss control and deficit reduction, followed by a series of initiatives to revitalize idle assets, streamline structures, and implement strategic restructuring.

The reform has accelerated the strategic deployment of state capital into emerging technology sectors. Zeng introduced that notable breakthroughs include a new energy vehicle (NEV) project developed by Qingling Motors in partnership with CATL, and a heavy-duty commercial vehicle collaboration with Huawei.

Meanwhile, local state-owned capital investment and operation firms are playing an increasingly active role in guiding industrial development. Xie Wenhui, Party Secretary and Chairman of Chongqing Yufu Holding Group, noted that since the start of 2024, the group has completed 208 investment projects totaling 35.059 billion yuan. Of this, 33.6 billion yuan—96%—was directed toward advanced manufacturing.

Chongqing Yufu Holding Group has made a cumulative investment of 4.27 billion yuan in Seres. (Photo/Seres)

Key projects of Yufu include a cumulative investment of 4.27 billion yuan in Seres, a Chongqing-based NEV enterprise, which leveraged an additional 13.7 billion yuan in social investment. The funding supported the completion of three major factories and the mass production of four core vehicle models.

In 2024, Seres achieved annual revenue of 145.2 billion yuan, marking a 405% year-on-year increase. Its market capitalization surpassed 200 billion yuan, making it the second most valuable automaker in China.

From January to April, Chongqing SOEs saw a 4.3% year-on-year increase in revenue, a 7.2% rise in added value, and a 9.6% growth in total profits, according to the data revealed at the press conference.