CHINA will “basically” conclude a pilot program aimed at attracting private investment in its State-owned enterprises (SOEs) by 2020, as the government seeks to increase economic efficiency when growth is losing momentum.

    The National Development and Reform Commission, the country’s top economic planning body, will invite private investors into SOEs active “in a number of industries” in the next two years. By 2020, the partial privatization plan, called “mixed-ownership” reform, will be completed, according to China Business News (CBN).

    Private investors are encouraged to invest using funds and materials such as land and intellectual property, an anonymous source told CBN. The government will decide on the ultimate ownership structure based on the functions of the SOEs, the source said, according to CBN.

    China promised to push ahead with mixed-ownership reform last November when it unveiled a landmark economic reform blueprint. It also pledged to make the market play a decisive role after the average return on assets for State entities stands at a paltry 4.6 percent, compared with 9.1 percent for private companies.

    A number of SOEs have gone ahead with plans to attract private investors. China Petroleum & Chemical Corp., Asia’s biggest refiner, has shortlisted 37 potential buyers as the company seeks to sell an up to 30 percent stake in its retail unit, which controls 30,000 fuel stations and 23,000 retail stores.

    China Mobile, the world’s biggest phone company by users, is also planning to let outside investors into a new media firm and its subsidiaries that will manage the carriers’ content services such as music, video and games, according to Caixin, an investigate journal based in Beijing.

    China’s State-Owned Assets Supervision and Administration Commission (SASAC) is also testing a pilot project for SOE reform. The commission announced in July that China National Building Materials Group and China National Pharmaceutical Group would be the first two central SOEs chosen for the mixed-ownership reform. However, SASAC provided no details on how it would proceed with attracting outside investment.(SD-Agencies)