China’s leaders plan to release broad guidelines in the coming months for restructuring the country’s bloated state-owned enterprises, the Wall Street Journal reported Tuesday.
Strategically important industries such as energy, resources and telecommunications are marked for consolidation, the report said, citing Chinese government officials and advisers with knowledge of the deliberations.
The merged entities will then be reorganized as asset-investment firms, with a mandate to make sure they run more like commercial operations than arms of the government, the report said.
Upper management will be under orders to maximize returns and prepare many of the companies for eventual listing on stock markets, sources told the paper.
Beijing is determined to “crack a hard nut”, Li Jin, deputy head of the China Enterprise Reform and Development Society (CERDS), was quoted as saying.
CERDS is a trade group under the State-owned Assets Supervision and Administration Commission.
But Beijing’s plan falls short of the steps advocated by some market-reform advocates.
One disappointing element is that it takes large-scale privatization off the table, the report said.
Also, the government will retain its current practice of naming senior management teams for the newly formed companies.
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