As a major hub for local state-owned enterprises (SOEs) nationwide, Shanghai's local SOEs achieved a total asset value of 32.5 trillion yuan in 2025, setting a new historical record. This was not the only milestone. In 2025, the total profit and net profit attributable to parent company shareholders of Shanghai's local SOEs grew by 12.3% and 11.2% year-on-year respectively, both reaching five-year highs. The total market capitalization of listed companies controlled by Shanghai's local SOEs soared to 3.2 trillion yuan, also a record high. At the 2026 Shanghai Municipal State-Owned Assets and Enterprises Reform Development and Party Building Work Conference held on January 23, Wu Wei, Standing Committee Member of the Shanghai Municipal Party Committee and Executive Vice Mayor, stated that it is essential to deeply understand the new situation facing the development of Shanghai's state-owned sector and take the lead and set an example in serving national strategic goals and acting as pioneering forces. He emphasized the need to better shoulder major responsibilities for enhancing Shanghai's urban energy level and core competitiveness, contribute significantly to stabilizing the city's economic growth, demonstrate leadership in building a modern industrial system, take proactive steps in achieving high-level sci-tech self-reliance and self-strengthening, play a main force role in boosting the city's energy level, and strive to be the vanguard of the city's reform, development, and innovation. He Qing, Secretary of the Party Committee and Director of the Shanghai State-owned Assets Supervision and Administration Commission (SASAC), stated that the "16th Five-Year Plan" period is a decisive phase for Shanghai's state-owned sector to implement a new round of comprehensive and deepened reforms, accelerate innovation-driven transformation, and achieve breakthroughs. Over the next five years, Shanghai's state-owned enterprises will focus on building world-class enterprises, creating sources of original technologies, enhancing their core functions and core competitiveness, and competing to be the vanguard and main force in serving Shanghai's "Five Centers" construction.
In 2025, amid profound and complex changes in domestic and international landscapes, the core functions of Shanghai's local SOEs were significantly enhanced, and their core competitiveness markedly improved. Taking the three-year period of the deepened SOE reform initiative as a cycle, by 2025, the total assets, total profit, and net profit attributable to parent company shareholders of Shanghai's local SOEs had increased by 16%, 24%, and 23% respectively compared to 2022, while the market capitalization of listed companies surged by over 42%, and risk exposure decreased by approximately 25% from its peak. Currently, global technological innovation has entered a period of intense activity. With the accelerated breakthroughs in a new round of global technological revolution and industrial transformation, it is more urgent than ever for Shanghai to seize the strategic high ground in future competition, necessitating the transformation and upgrading of state-owned enterprises. Particularly noteworthy is the accelerated shift of Shanghai's state-owned sector towards "new" directions. Data shows that in 2025, revenue from strategic emerging industries accounted for 30% of Shanghai SOEs' total revenue, up from 26.4% in 2024. In recent years, Shanghai has accelerated the concentration of state capital in key areas related to major national strategies and the "Five Centers" construction, in sectors vital to the basic operation and security of a megacity, and in the three leading industries and strategic emerging industries. Over the past three years, the restructuring of Shanghai's state-owned capital has sped up: seven new-type enterprises were established benchmarking against industry best practices, including three new entities formed in 2025—Guomao Holding, Shangjian Company, and Guozhi Technology; four sets of strategic reorganizations were completed in areas like modern finance, sci-tech investment, consulting services, and urban operations focusing on industrial chain synergy; and ten professional integration projects were implemented in sectors such as gas and cultural tourism, adhering to the principle of "one enterprise, one business; one business, one strong player". Among these, the merger and reorganization of Guotai Junan and Haitong Securities into Guotai Haitong Securities Co., Ltd. (601211.SH) represents the largest A+H dual-market absorption merger case in the history of China's capital markets, underpinned by Shanghai's strategy to build an international financial center and cultivate world-class investment banks. Meanwhile, the acquisition of Shanghai Investment Consulting Group Co., Ltd. by Shanghai Research Institute Of Building Sciences Group Co.,Ltd. (603153.SH) aligns with Shanghai's goal of fostering first-class, internationally competitive local construction consulting service enterprises.
He Qing stated that over the past three years, Shanghai has solidified the role of SOEs as main players in technological innovation. Eight strategic emerging industry platforms have been successively established, targeting breakthroughs in "bottleneck" sectors, and promoting comprehensive breakthroughs in Shanghai's integrated circuit industry chain, all-domain layout in artificial intelligence, and full ecological empowerment in biomedicine. In 2025, enterprises supervised by the Shanghai SASAC spent 87 billion yuan on scientific and technological activities, achieving breakthroughs in areas such as high-end CIS chips, electronic special gases, autonomous driving, and gas turbine hot-section components. Platforms for integrated circuit equipment, computing power technology, and data corpora accelerated their substantive operations. To enhance targeted policy support, the Shanghai SASAC established a "four-categories, one-layer" classified supervision system, adjusting the supervision classification of enterprise groups into capital operation, industrial development, financial services, and urban support categories, and pioneered the creation of a Sci-Tech Innovation Layer in key subsidiaries to provide precise support for innovative enterprises. Currently, 49 subsidiaries have been selected for this Sci-Tech Innovation Layer. He Qing indicated that in 2026, Shanghai's state-owned sector will focus on seven key tasks. These include promoting quality and efficiency improvements for stable growth, optimizing the structure of state-owned capital layout, strengthening the role of SOEs in technological innovation, enhancing the operational level of state capital, accelerating the development of managerial and talent teams in SOEs, improving the effectiveness of state asset supervision, and切实加强 (effectively strengthening) Party leadership and Party building. Specifically, in strengthening the role of SOEs in technological innovation, Shanghai will establish a batch of innovation consortiums driven by real-world scenarios and mission-oriented tasks, promoting a shift from "point-based" innovation to an "ecosystem-type" model. Tailored measures will include establishing RDF (R&D reserve fund) systems, technology manager programs, and "Strategic Scientist Committees" based on individual enterprise conditions, optimizing management systems to meet the needs of sci-tech innovation enterprises, implementing an "AI+" initiative, and promoting the application of vertical-specific models and intelligent agents across different industries.
The 660 billion yuan state-owned capital fund system is poised for reform. On January 22, the IPO application of Shanghai Enflame Technology Co., Ltd. for the Sci-Tech Innovation Board was accepted by the China Securities Regulatory Commission. Consequently, Shanghai's GPU chip "Four Little Dragons"—including Metax Integrated Circuits (Shanghai) Co., Ltd. (688802.SH), ILUVATAR COREX (09903.HK), and BIREN TECH (06082.HK)—are about to converge in the capital markets. A point of recent widespread attention is that behind these "Four Little Dragons" stand Shanghai's state-owned capital investment and operating companies and their managed funds. "Over the past three years, we have adhered to the principle of 'fund empowerment and forward-looking cultivation', promoting the deep integration of state-owned capital with the development of new productive forces," He Qing stated, revealing that the current scale of Shanghai's state-owned capital funds exceeds 660 billion yuan. Among them, the three leading industry guidance funds officially launched in July 2024, together with the future industry fund, form a massive 100-billion-yuan Shanghai state-owned capital mother fund "giant", which achieved highly efficient operations—being planned, established, and making investment decisions all within the same year. To date, the three leading industry mother funds have invested in 22 strategic projects, leveraging 200 billion yuan in social capital and achieving a leverage multiplier of 5 times. To accelerate the creation of sources for original technology, Shanghai's state-owned capital funds, anchored on core technology攻关 (攻坚克难, tackling key problems), have made a series of布局 (arrangements)围绕 (centering on) the entire sci-tech innovation chain. On July 24, 2025, initiated by Shanghai International Group, Shanghai Guosheng Group, and Shanghai Guotou Company, and jointly funded by 16 municipal SOEs, the Qiyuan Public Welfare Foundation was established—the first public welfare foundation for basic research initiated by a state-owned capital system in China, focusing on funding innovative, highly controversial, high-risk, and non-consensus basic research in new types of R&D institutions. On December 17, the foundation signed agreements for its first batch of funded projects, with each project receiving up to 1 million yuan in support. Furthermore, Shanghai has taken the lead in establishing an 80-billion-yuan merger and acquisition fund matrix in areas such as integrated circuit equipment, biomedicine, and EDA, to better leverage the important role of funds in enhancing the security and resilience of industrial and supply chains.
The year 2026 marks the beginning of a new round of state-owned enterprise reforms and the start of the "16th Five-Year Plan" period. He Qing stated that Shanghai aims to enhance the operational level of state capital. This involves urging state-owned capital investment and operating companies to strengthen their functions. Reforming the management system for state-owned capital funds, strengthening collaboration and接力 (handover/relay) with various types of social capital including private and foreign capital, and building a development pattern for municipal and district-level state-owned capital funds that have distinct focuses and complement each other. Supporting listed companies in conducting mergers and acquisitions focused on their core competitive advantages and developing their "second growth curve".
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