The rumors of State Grid's divestiture of equipment manufacturing have been around for a long time. Recently, State Grid Corporation of China has seen substantial progress in its divestiture of equipment manufacturing business. On December 23, 2020, Xu Ji Electric, Pinggao Electric, and Baoguang Co., Ltd. issued announcements one after another. Information showed that some subsidiaries of the State Grid Corporation of China are planning a strategic reorganization with China Xidian Group. Xu Ji and Pinggao may be placed under China Xidian Group.

According to industry sources, before the end of 2020, Pinggao, Xu Ji and Shandong Diangong Electric under the State Grid will all be merged into China Xidian Group. Prior to this, the State Grid Corporation of China had already carried out divestiture and transfer of Luneng Group and Interchina Health.

The website of the State Supervision Commission of the Central Commission for Discipline Inspection mentioned in the “Notice of the Party Group of the State Grid Corporation of China on the Status of the Third Round of the 19th Central Inspection and Improvement Exhibition” published on March 22, 2020. He sticks to the main responsibilities of the power grid, is determined to withdraw from the traditional manufacturing and real estate business, and resolutely completes the task of deepening the reform of collective enterprises on schedule. After the disposal of non-core businesses was included in the key work documents for reform in 2020, State Grid Corporation of China rarely publicly stated its position on the separation of primary and secondary operations.

The electrical equipment manufacturing business of State Grid is mainly undertaken by its subsidiaries Nari Group, Xu Ji Group, Pinggao Group, Shandong Electric Group, and State Grid Xintong Industry Group. The real estate business is undertaken by Luneng Group and State Grid ZTE Corporation, holding a listed company Tianjin Guangyu Development Co., Ltd. The business scope covers residential product development, commercial real estate project development and operation, and property management services.

Premier Li Keqiang presided over an executive meeting of the State Council on September 17, demanding support for the reform and development of state-owned enterprises and private enterprises in accordance with the principle of "two unwavering". The meeting pointed out that it is necessary to continue to relax market access and speed up the divestiture of competitive businesses such as equipment manufacturing by grid companies.

Among the units directly under the State Grid, Luneng Group Co., Ltd. has been placed under China Green Development Co., Ltd. China Health Group Co., Ltd., and the media "seal" has also been transferred to China General Technology Group Co., Ltd.;

The asset reorganization and allocation of Xuji Group Co., Ltd. and Pinggao Group Co., Ltd. corresponded to the market reform policy for the separation of the central government from the main and auxiliary industries to withdraw from competitive industries.

"Separation of main and auxiliary" is the power industry reform goal established since the beginning of the power reform in 2002. Therefore, in addition to equipment manufacturing, market-oriented competitive businesses such as finance, insurance, trust, securities, financial leasing, electric vehicle services, e-commerce, information communication, and integrated energy may also be divested. Editor/Sang Xiaomei