The Ministry of Finance ("MOF") has recently issued the Circular on Further Intensifying and Improving the Management of State-owned Assets of Administrative and Public Institutions (the "Circular").
The Circular sets out requirements for "enabling relevant departments and entities to practically shoulder their subject responsibilities for asset management", "losing no time in working on the registration, account-entry and management of public infrastructure", "exploring ways of establishing an asset sharing and deployment mechanism", "optimizing the management of newly-acquired assets", among others. The Circular stresses the need to strictly implement provisions concerning renting or lending out assets and concerning the management of external investment, and to carry out necessary formalities for approval for such activities. In addition, it contains a strict prohibition on illegally renting or lending out offices, adding that in principle, leasing out such assets as houses shall be subject to the public competitive bidding; lending funds to subordinate entities or affiliated entities in an illegal manner is also forbidden. Meanwhile, efforts shall be made to standardize the management of external investment by timely counting such investment into financial statements for the accounting purpose, rather than itemizing external investment under the "Account Current" title on a long-term basis. Attention shall also be paid to strengthening the management of income derived from asset disposal, income earned from renting or lending business, and returns of external investment, in order to regulate actions related to receipts and expenditures.