Restructuring of China state-owned enterprises continues with entry of private capital
August 29, 2017 Category Macro-economy, Weekly
Cofco Capital Investment is lining up seven strategic investors, attracting CNY6.90 billion of funds for its mixed-ownership reform that is aimed at boosting its competitiveness. The China Structural Reform Fund Corp will inject CNY800 million of capital and become the fifth largest shareholder in Cofco Capital. Other shareholders include Beijing Capital Agribusiness Group, Guangdong Wen’s Foodstuff, Shanghai International Group and other financial institutions.
“The combination of state-owned with private capital, and the agricultural industry with finance, will create a platform of harmony and cooperation, that will better serve the internationalization of COFCO’s agriculture supply chain,” China Chengtong said.
China has called for the restructuring of state-owned enterprises to advance its supply side reforms, with the National Development and Reform Commission (NDRC) approving the third batch of state firms in a pilot scheme for mixed-ownership of state and private capital.
China United Network Communications Group has sold a 35.2% stake in Hong Kong-listed China Unicom to 14 big companies for CNY 78 billion, including Alibaba Group Holding, Tencent, Baidu, Suning and JD.com. Still, state firms will still own a large majority in the world’s sixth-largest mobile network operator by subscribers.
China United said the “mixed ownership reform” would “further optimize its corporate governance in accordance with market-oriented principles and enhance its overall efficiency and competitiveness”. Through mergers, the number of centrally-managed SOEs has been reduced to 99, down from 196 in 2003. President Xi Jinping has called for SOEs to maintain a controlling and influential role in the overall economy.
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