Top China SOEs to Restructure After Games

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July 28 – China has announced that it will restructure state-owned enterprises after the Beijing Olympics.

Since the government started restructuring in the past few years, SOEs have decreased from 196 to 149. Some of the top centrally administered SOEs in the country include leading oil producer PetroChina Co. and Baoshan Iron & Steel Co.

The State-owned Assets Supervision and Administration Commission have instructed SOEs to limit their investment scale in addition to regulating mergers and acquisitions. They will be required to have self-owned capital no less than 40 percent in any investment with a stable debt ratio.

“Centrally administered SOEs should definitely be industry leaders, at least ranking among the top six in their field,” Commission chief Li Rongrong told China Daily, “Those who fail to meet the standard will be restructured.”

For the first half of the year, China SOE sales revenue increased by 25.7 percent to RMB5.77 trillion, up by 5.4 percentage points compared to last year’s figures. On the other hand, SOE profits decreased by 10.3 percent to RMB425.6 billion during the same period.