Local Government Agency Assigned to Control State Owned Firms during Reforms
A local government agency will be overseeing six State owned firms that will participate in the reform process that will widen the role of the private capital plays in the massive State sector in China.
The six companies are China National Cereals, Oils and Foodstuffs Corp., China National Building Materials Group, China National Pharmaceutical Group Corporation State Development & Investment Corp., Xinxing Cathay International Group, China Energy Conservation and Environmental Protection Group. According to the State owned Assets Supervision and Administration Commission of the State Council which is responsible for around 100 of the biggest State owned enterprises in China said that three of these firms will be chosen to do reforms. Several of these State owned enterprises will have listed subsidiaries, but the overall role of a private capital in the groups will control the bulk of the economic activity.
This will be the latest move of the Central Government that will carry out the biggest overhaul of the bloated and debt stricken State own sector since 1990s. Another goal for the reform program is to enhance the State owned regulatory model and focus more on capital management.
Last March, President Li Keqiang stated that the electricity, resource development, telecom, banking, oil and utilities sectors are open to non State capital. And in recent months top conglomerates such as CITIC announced their spin offs and have restructured plans which local authorities started experimenting with new management structures. The last time a major reform and restructuring program for State owned firms the government were either sold off or shut down thousands of firms cutting down the number down from 260,000 to 110,000.