SOE Reform: CFHI Achieves Revitalization through Market-Oriented Management Mechanisms

China First Heavy Industries (CFHI) turned around loss and created a path to revitalization thanks to implementation of market-oriented recruitment and contractual changes in leadership and managerial level employment.

In the past three years, the company's profit and operating income increased by 131.11 and 66.95 percent on average. As of the end of May this year, the year-on-year growth of its total profit and operating income were 47 and 15 percent.

The progress was greatly owed to the company's decision to establish a scientific and normative institutional guarantee system, an authorization mechanism of management and control and market-oriented leadership allocation.

CFHI implemented a three-year tenure system in all subsidiaries and made employees' performances a major part of deciding their positions.

Employment contracts are signed with members of the board of directors and staffers at the managerial level of directly-affiliated subsidiaries according to their duty and authority, which highlights development quality and efficiency and clarifies goals and missions as well as rewards and punishments during their tenure.

(Executive editor: Niu Yilin)