Six large state-owned enterprises (SOEs) will pilot reforms in ownership, management and supervision, Chinese authorities announced on July 15.

The companies are the State Development and Investment Corp. (SDIC), China National Cereals, Oils and Foodstuffs Corporation (COFCO), China National Building Materials Group (CNBM), China Energy Conservation and Environmental Protection Group (CECEP), Xinxing Cathay International Group (XXCIG) and China National Pharmaceutical Group (Sinopharm), according to the State-owned Assets Supervision and Administration Commission of the State Council (SASAC).

The SDIC and COFCO will be "reorganized" to establish "state-owned asset investment companies" on a trial basis. Mixed-ownership pilot reforms will be carried out at Sinopharm and CNBM, said SASAC spokesman Peng Huagang at a press conference.

A more effective board of directors system will be set up at XXCIG, CECEP, Sinopharm and CNBM, and disciplinary inspection teams will be sent to another two or three unnamed SOEs, said Peng, who is also in charge of reform issues at the SASAC.

The "state-owned asset investment company" has been designed to make the "state"—the SASAC in this case—a stakeholder instead of a manager of a SOE so as to raise the company's management and operation efficiency.

For mixed-ownership reform, SOE giants like China National Petroleum Corp. and China Telecom have carried out their own plans to diversify corporate ownership and attract private funds.

The new board of directors system is meant to allow the board to act as the company's decision-making center while reducing the management entitlements of investors.