Reform of State-owned enterprises is one of the biggest challenges for China's further reform, and entails "top-level design" from the national authorities but not the State-owned asset administration, according to an article in China Business News.

Here are excerpts:

"Top-level design" has been emphasized again by China's State-owned asset administration authority at a conference on reform of State-owned enterprises.

The authority said "top-level design" refers to a series of reforms, including accelerating the listing of SOEs, regulating the boards of directors, deepening personnel, employment and income distribution reforms and establishing more efficient performance evaluation systems.

This is the right direction for SOE reform. However, these problems have existed for a long time. The reform of SOEs not only lags behind the public's expectations but also the requirement for the social and economic development of China.

"Top-level design" means the senior authorities should settle on how to carry out the reforms of SOEs. But many reform paths indicated by the senior authorities for State-owned assets are not carried out by some SOEs and meet considerable resistance.

The operation and management of SOEs, as a legacy of China's planned economy, involve a number of different authorities. Many SOEs are powerful monopolies dominating some fields of strategic importance to the country.

The SOEs are reluctant to fill China's national pension gap with their profits. SOEs are also important contributors to the income gap in Chinese society. To some extent, they are one of the main obstacles to China's further reforms in various fields.

This complicated reform entails top-level design. The reform must be carried out from the top and on down.