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China has taken a significant step toward formulating a foundational and comprehensive law on state-owned assets, as a draft law was submitted on Monday for its first deliberation at an ongoing session of the Standing Committee of the National People's Congress, the Xinhua News Agency reported on Monday.

According to legal experts, the legislation is poised to improve the system for enhancing the efficiency of state-owned asset governance.

Comprising 62 articles across seven chapters, the draft law upholds the Party's leadership over the governance of state-owned assets, seeks to standardize management and oversight practices, and aims to ensure lawful protection and efficient utilization of the assets, thereby promoting the high-quality development of the state-owned sector, said the report.

China's state-owned assets play a prominent role in the national economy, Li Changan, a professor at the Academy of China Open Economy Studies under the University of International Business and Economics, told the Global Times on Monday. However, in the course of past development, issues have emerged such as irregular business operations and the loss of state-owned assets, said Li.

Therefore, bringing state-owned assets under the rule of law will not only help strengthen their supervision, management, and operation, but will also have a highly positive effect on the development of the entire national economy, Li said, adding that the legislation is also expected to further improve the legal system for enhancing the efficiency of state-owned asset governance.

The main contents of the draft include clarifying the ranges of the state-owned assets that encompass state-owned natural resource assets, administrative and institutional state-owned assets, and enterprise state-owned assets, among other state-owned assets. It also stipulates the management system for state-owned assets, including the planning, allocation, use and maintenance, revenue, disposal, risk management, and assessment and evaluation systems for various types of state-owned assets, the Securities Times reported.

It also defines the supervision system for state-owned assets and other related systems.

Tian Yun, an economist based in Beijing, told the Global Times on Monday that the law will help address gaps at the top level of the legal framework. In earlier years, considering that state-owned natural resource assets, administrative and institutional state-owned assets, and enterprise state-owned assets differed significantly in terms of function and regulatory approach, it was difficult to regulate them comprehensively under a single, all-encompassing law, said Tian.

Enterprise state-owned assets account for a relatively large proportion of state-owned assets, and in practice, there was an urgent need for dedicated legislation, said the report. The current Law on State-Owned Assets of Enterprises, which came into effect in May 2009, limited its scope of application to enterprise state-owned assets, the Securities Times reported.

As the 15th Five-Year Plan period (2026-30) is about to begin, the draft law, once implemented, is expected to better enable state-owned assets to play a leading role in the economy, and promote continuous improvements in efficiency and supervision, Tian said.

It will also play a greater role in stabilizing economic operations, fulfilling social responsibilities, and providing public goods, the expert said.