The State-owned Assets Supervision and Administration Commission ("SASAC") of the State Council has recently issued the Interim Measures for Supervision and Administration of Execution of Budget Outlays for State-owned Capital Operation of Central Enterprises (the "Measures"), immediately effective from the date of issuance.
The Measures provide that the SASAC will supervise and administer the execution (including the performance achieved) of capital budgets of central enterprises, pursuant to the administrative provisions on responsibilities of capital contributors and capital budgets, and will urge and supervise rectification if any problems are found. Meanwhile, the Measures clearly state that the SASAC will explore ways to institute the performance assessment system for capital budgets of central enterprises, whereby performance assessment will be conducted to evaluate those key enterprises financed under capital budgets, major programs and significant capital arrangements, and targeted performance assessment may be carried out by third-party agencies when necessary. Moreover, the Measures require that in response to problems found through supervision and administration of execution of capital budgets for central enterprises, the SASAC shall take different measures according to the gravity, such as holding a regulatory talk to order corrective actions, circulating a notice of criticism, withdrawing the budget fund and suspending the acceptance of claims for capital budgets, and pursue their liability in accordance with relevant provisions if their violations lead to state-owned asset losses or give rise to other negative consequences.