The State-owned Assets Supervision and Administration Commission released a plan recently to guide and supervise local State assets supervisory and regulatory work.

One of the key points of the plan is that it urges local State assets regulators to draft rules for employee stock ownership plans.

In June 2014, the China Securities Regulatory Commission released guidelines to allow companies listed on China's stock exchanges to offer employees stock ownership plans. More than 100 listed companies have proposed taking part in this plan so far. Also, some non-listed companies are seeking ways to give employees stock ownership options, as an incentive.

Although this could be a positive way to encourage employees, it is not suitable for all companies.

Only when a company has good performance in the market can employees make a profit from owning shares in it. If the stock price of the company declines, employees will lose money.

Also, many listed companies are overvalued. It would be very risky for these kinds of companies to promote stock ownership among their employees.

The authorities should pick suitable companies when pushing forward pilot programs such as this, and then expand the plans gradually as experience is accrued.

The author is Tan Haojun, a media personality.

www.ce.cn