The State-owned Assets Supervision and Administration Commission refuses to confirm the report

    CHINA will likely cut the number of its Central Government-owned conglomerates to 40 through a series of mergers as the government pushes forward a plan to overhaul the country’s underperforming State sector, domestic media reported yesterday.

    Currently, the Central Government owns 112 conglomerates, including 277 public firms listed on the Shanghai or Shenzhen stock exchanges with a market capitalization of more than 10 trillion yuan (US$1.6 trillion), according to the official newspaper Economic Information Daily.

    The consolidation will first take place in commercial sectors, especially in competitive industries, the paper said, quoting an anonymous source.

    “Resources will be increasingly concentrated on large enterprises to avoid cut-throat competition, like what CSR Corp. Ltd. and China CNR Corp. Ltd. did when competing against each other for projects overseas,” the newspaper said.

    However, the State-owned Assets Supervision and Administration Commission, which oversees Central Government-controlled industrial enterprises, said late yesterday in response to the report in a statement on its website that the newspaper didn’t verify the information in its report with the agency.

    The restructuring plan is critical to President Xi Jinping’s broader push to raise the performance of China’s lumbering State sector, at a time when the government struggles to find the right policy mix to support the world’s second-largest economy that grew in the first quarter at its slowest pace in six years.

    The policy-directed merger of State-owned CNR and CSR, China’s top two train makers, created a US$26 billion company able to win global rail deals from rivals such as Germany’s Siemens AG and Canada’s Bombardier Inc.

    Avoiding the loss of State assets will be “the mostimportant and core requirement” when mergers that involve sensitive assets take place, the newspaper said.

    (SD-Agencies)