Yang Kaisheng, ex-ICBC chief and a national political advisor. [Photo/China Daily]

China should confirm the leverage ratios of State-owned enterprises by category and inject capital into those related to national welfare and security, said the former president of the Industrial and Commercial Bank of China.

"In order to implement the policy of 'cutting overcapacity, destocking, deleveraging, reducing corporate costs and shoring up weak spots' for SOE reform, we need to find the reasons for the high leverage ratios of some State-owned enterprises and take effective measures," Yang Kaisheng, who is also a national political advisor, said over the weekend.

Five major tasks of cutting overcapacity, destocking, deleveraging, reducing corporate costs and shoring up weak spots were listed at the Central Economic Work Conference in December 2015, for China's socioeconomic development in 2016.

China will continue to accomplish the five tasks in 2017 through reform methods, Premier Li Keqiang said as he delivered the Government Work Report on Sunday.

Yang told China Daily that loans from banks had become a main financing source of State-owned enterprises' operations and expansion, and there is a shortage of investment from SOE's major shareholders.

"Besides investment returns and capital safety, State-owned enterprise shareholders and supervisors have the responsibility to guarantee the stability of SOE's leverage ratio," said Yang.

"SOE shareholders and management departments should confirm the leverage ratio of State-owned enterprises by category and pay close attention to the change of the ratios."

Yang said if the leverage ratio of a State-owned enterprise is close to the threshold, they need to inject capital into the company.

"As State-owned capital is limited, the funds should be used in companies related to national welfare and people's livelihoods and national security," he said.