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China allows investments in state firms

China will open its state-owned firms to greater investment by private companies, a state-run newspaper reported Monday, as media ramp up expectations from a top Communist Party meeting on economic reforms.

According to the China Daily, private partners will be allowed to take 10 to 15 percent stakes in the country’s state-owned enterprises (SOEs).

The move would give such companies or investors a bigger say in decision-making, it quoted officials of the state-owned Assets Supervision and Administration Commission (SASAC) as saying.

The agency is a powerful body that oversees large SOEs collectively worth trillions of dollars, many of which enjoy monopolies in key sectors such as rail and energy.

The change appears to differ from existing partial flotations of SOEs where China’s big four state-owned banks are all quoted in Hong Kong and other overseas markets, as are units of oil giants Sinopec, CNOOC and CNPC, several subsidiaries of conglomerate China Resources, telecom behemoths China Mobile and China Unicom, and scores of other entities.

But partnerships are rare, with the China Daily noting the “rare exception” of a 2003 deal that handed private industrial conglomerate Fosun Group 49 percent ownership in a joint venture with state-run China National Medicine Corp.

“All kinds of companies could join SOE restructuring,” the China Daily quoted Bai Yingzi, director of SASAC’s enterprise reform division as saying.

The report came on the third day of a four-day gathering known as the Third Plenum at which leaders of the ruling Communist party are expected to draw up a decade-long blueprint for the world’s second-largest economy.



 

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