Head auditor calls for tougher SOE audits
The head of the National Auditing Office (NAO), Li Jinhua, called for tougher internal auditing standards for state-owned firms’ in an article on the NAO website. Li said internal auditing should focus on the financial security and viability of state-owned assets, as well as account for financial losses and any sales of business units. Li outlined five key factors contributing to SOE losses: State-owned enterprises don’t follow legal procedures for mergers and acquisitions during restructuring; some SOEs gradually separate quality assets into non-core subsidiaries in which management hold stakes, which is not just an asset loss but also a corruption issue; management of SOEs outsource quality assets or businesses to privately-held companies founded by their relatives or acquaintances; inefficient and imbalanced internal corporate distribution causing significant waste of resources; non-economic SOEs which need office space, training bases and financial support and incentives but do not generate profit.

NDRC to continue drug pricing cuts
An official with the National Development and Reform Commission (NDRC) price bureau said it would continue to gradually trim drug prices according to drug types, the Beijing Times reported. The NDRC official said China has adjusted drug prices 18 times since 1997, or once every two years on average, but the timeframe for the next series of adjustments would depend on market conditions. The official added that the NDRC was considering a pricing policy according to patent drugs, new drugs or generic drugs in order to complement new medical reforms. It plans to have varied controls on profit margins and fees based on the individual drugs’ innovation level and patent status.

Central bank urges attention on energy financing
People’s Bank of China deputy chairman Xiang Junbo warned China needed to pay better attention to how it financed its energy needs if it wanted to ensure the future security of its energy supplies, the China Security Journal reported. Speaking at an energy finance forum in Xian, Xiang said the government also needed to ensure the execution of the country’s energy development strategy as set out in the 11th Five Year Plan. He identified several issues to be addressed. First, new financing and investment channels were needed to develop the energy sector. Second, the energy credit structure needed to be optimized. Third, a risk management entity was needed to monitor energy financing risks. Fourth, an energy commodities market was needed to strengthen China’s influence over international energy prices. Fifth, better coordination of policy and administration related to energy financing was required. Finally, the country’s social credit environment and infrastructure needed to be optimized.