Every industry is racing to upgrade in the digital economy, and state-owned enterprises – pillars of the national economy – are driving down the fast lane. A Renmin University of China state-owned economy research institute study finds that the number of digitally transforming Chinese SOEs has climbed since 2010, with the highest share transforming in the R&D stage.
Seizing the moment for intelligent upgrading
Harbin Electric’s turbine company upgraded its blade plant with intelligent equipment and digital management; China Construction Steel Structure built a four-tier big-data management cockpit, smart-site platforms and intelligent factories; and the merged CHN Energy is rebuilding its traditional business systems on a digital foundation for unified, science-based, informationised decision-making. SOE digital transformation cases abound.
Regulators moved too: in February, the State Council’s assets supervision commission issued a notice setting the foundation, direction, priorities and measures of SOE digital transformation, and later signed a strategic agreement with MIIT to accelerate central SOEs’ IT-manufacturing fusion and digital transformation.
Chongqing University of Technology associate professor Wang Wentao told the newspaper that top-level design fusing digital economy development with SOE reform has drawn high attention, and that under new infrastructure and the dual carbon goals, the new technological revolution will carry SOE development fully into an intelligent era.
Technology empowers quality growth
In Nanning, Guangxi Investment Group’s China-ASEAN digital economy industrial park is advancing fast, forming an IT-application innovation cluster that has attracted more than 50 enterprises. Digital transformation reshapes SOEs’ production performance, operations, innovation and competitive models, the Renmin University institute notes – and early SOE adoption of digital transformation is both an inevitability of the digital economy and a reflection of the sector’s particular mission and advantages.
Researcher Yang Jidong argues SOEs’ economic and social responsibilities form the endogenous drive of their digital transformation, while their abundant internal and external resources and full-process capabilities provide the foundation. As the backbone of high-quality growth, SOEs’ acceleration will speed new technology innovation, new product cultivation, new model diffusion and new business formats – and push Chinese industry toward the upper-middle of global value chains.
Filling the gaps
SOE digitalisation still faces immature infrastructure planning, a long and arduous transformation, complex organisational structures – and, above all, managers’ insufficient understanding of digitalisation, with many SOEs lacking long-term plans that waste resources and hurt long-term performance.
Yang suggests doing what is needed and forgoing the rest given finite resources: concrete progress on technology, management, data and security; guidance on digitalising products, production, users and industry in parallel; and empowerment through infrastructure, digital industries and key technology breakthroughs.
‘The industrial internet is the cornerstone of deeply fusing the digital economy with SOE reform, and the key lever for supply-side structural reform and the shift between old and new growth drivers,’ Wang said – building a development model suited to China’s conditions is a priority for the transition. The regulator’s notice lays out the moves: solidify the digital foundation, accelerate industrial digital innovation, develop the digital industry in full, and create industry demonstration models – and SOEs, from nuclear power to energy, are deploying fast. ‘Digital transformation means integrating internal and external resources with next-generation IT around the interaction of data, business processes and organisation, continuously raising core competitiveness and building sustainable advantage,’ said Yu Jianfeng, chairman of China National Nuclear Corporation.
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