Mold Making, Alu Manual Mold Design,Custom Porous Mold Suzhou AME Aluminum Product Co.,Ltd , https://www.ame-al.com
Corporate Perspective: Why Enterprises Are Concerned about the Management of the City
On the eve of National Day, 21 provincial enterprises, including five chemical companies, were transferred to Baoji City. Last week, an additional 27 state-owned enterprises were assigned to Xianyang City’s management, marking a significant shift in the governance of Shaanxi’s provincial enterprises. This move signals the beginning of a broader decentralization strategy, where enterprises are being handed over to local authorities.
The author observed that several major chemical companies in the province had already sensed the trend and were actively seeking solutions through asset restructuring and corporate reorganization. Many of them have been working closely with large industry players like coal and oil companies—some even allowing these entities to hold shares. The underlying motive is clear: by aligning with stronger partners, they hope to escape the challenges of city-level management.
But why do companies resist being transferred? According to a recent survey, chemical companies have multiple concerns. First, there's worry about whether local governments can effectively manage their operations. Chemical companies rely on a complex supply chain, with raw material procurement and product distribution often spanning thousands of miles. Some operations even cross multiple railway bureaus. In the past, provincial coordination helped ease these logistical pressures. Now, if moved under city management, they fear losing this advantage, leading to tighter supply chains and more operational stress.
Second, there's concern about becoming “Tang Yanrouâ€â€”a term used to describe companies that become targets for local authorities. Executives shared their frustration, noting that during tough times, local departments rarely provided meaningful support. If fully transferred, they fear that previously difficult tasks will now be justified and easier to enforce, potentially leading to unfavorable treatment or even closure.
Third, there's anxiety about the impact on the company’s reputation. Provincial enterprises typically enjoy a higher level of recognition and broader networks, which contribute to their strong brand image. Once transferred to city-level management, they believe their intangible assets may suffer, making it harder to compete externally. Employees, too, are reluctant to accept the change, as it may affect job security and morale.
The reluctance of enterprises to transfer to city management raises deeper questions about the current state of state-owned enterprise reform. While decentralizing control can help the provincial government better guide development, the experience of Dongfeng Tire serves as a cautionary tale. A year ago, the once-great company ended up in a crisis, partly due to frequent changes in leadership and management. This highlights the risks of constant shifts in oversight.
In conclusion, while transferring enterprises to local authorities may seem beneficial from a macro perspective, it’s essential to consider the long-term implications. Stability and continuity matter, especially for industries like chemicals, where operational efficiency and external relationships are crucial. As reforms continue, careful planning and understanding of each enterprise’s unique needs will be key to avoiding unintended consequences.