Business

China's big state companies being restructured

BEIJING: All big Chinese companies owned by the central government will be registered as limited liability companies or joint-stock firms by the end of the year, as Beijing moves to make them more nimble, efficient and modern.

About 90 per cent of China's state-owned firms have already completed the process, which helps improve their governance structures and management, the cabinet said yesterday.

It did not say whether private capital will be allowed to invest in the state giants or whether they will list shares.

The central government hopes to revive the country's bloated and debt-ridden state-owned sector and create conglomerates capable of competing globally.

Part of the reforms will involve shutting the most uncompetitive firms. The ownership structure of some state-owned enterprises will also be modernised.

One of the biggest problems facing China, particularly the lumbering state-owned giants, is a spike in debt since the 2008 global financial crisis.

STEPPED UP

The authorities have made efforts to contain debt risks over the past year, and part of those steps have involved the restructuring of state firms.

Earlier this year, People's Bank of China Governor Zhou Xiaochuan said banks will withdraw support for financially unviable firms, repeating pledges by other officials to drive "zombie" firms out of the market.

China is also pushing mixed ownership to allow private capital to invest in firms while retaining the government's presence in the companies.

The state-owned asset regulator has said that "erroneous" notions such as "privatisation" and "denationalisation" should be avoided.

Efforts will be made to strengthen the party's leadership at big state firms and to prevent the loss of state assets during restructuring, the cabinet said yesterday. - REUTERS

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