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China to merge central SOE group to 100: state media

Thursday, July 14, 2016 - 20:56
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China will continue to merge its biggest state-owned enterprise (SOE) groups and reduce their number this year to no more than 100, state media reported on Thursday.

[BEIJING] China will continue to merge its biggest state-owned enterprise (SOE) groups and reduce their number this year to no more than 100, state media reported on Thursday.

Mergers among central government-controlled SOE conglomerates were accelerating, said Peng Huagang, deputy secretary-general of the State-owned Assets Supervision and Administration Commission (SASAC), state radio said.

The number of central government conglomerates, which now stands at 106, would fall to within 100 this year, Mr Peng said.

Ten central SOEs were in active discussions to create five groups, Peng added, according to the report.

On Monday, China announced it would merge its biggest tourism operator, China International Travel Service Group Co, with its Hong Kong-based counterpart, thereby removing the group from central government supervision.

Last September, Beijing launched a far-reaching reform drive aimed at improving the competitiveness of the sprawling and inefficient state-owned sector, utilizing mergers and share sales, while closing the loss-making "zombie firms".

Total profits for central government SOEs declined by 3 per cent during the first half of the year, to 623.47 billion yuan (S$125.67 billion), SASAC said, according to the report, while revenue for the companies declined by 1.8 per cent to 10.8 trillion yuan for the period.

The Ministry of Finance reported that profits for the entire state sector fell 9.6 per cent during the first five months of 2016 from a year earlier, reaching 837.39 billion yuan.

REUTERS