In that situation, the company would have to diversify, "as flour and edible oils would not be enough to generate a competitive profit".

Although Cao said that the company would welcome external management to raise its level of competence, he noted that the compensation system is still heavily controlled by the national asset regulator.

Welcoming change

But there are also companies that are making efforts to embrace change.

Wang Xiaodong, a spokesman for the Shanghai-based property developer Greenland Holdings Group, said the company has been actively introducing external investors and preparing for a listing in the A-share market.

"With a higher internationalization level, we'll also recruit more foreign managers," he said.

Other major SOEs in Shanghai - including Shanghai Baosteel Group Corp and Shanghai International Port (Group) Co Ltd - said they were still evaluating the city's plans.