Private capital eyed in SOE reform
Source: Xinhua |
May 26, 2012, Saturday
|
Print Edition
Print Edition
AFTER sweeping economic reforms, which in three decades have powered China to become the world's second-largest economy, the country is moving ahead with reform of state-owned enterprises by inviting private investment in their restructuring.
The move is in line with other recent measures announced by the central government to stimulate the national economy while also opening the more heavily state-controlled and monopolized sectors to private investment.
A guideline, issued by the State-owned Assets Supervision and Administration Commission of the State Council yesterday, did not give details on how private capital could get involved in SOEs' restructuring, but provided some general directions.
Private investors can participate in the restructuring of SOEs through cash investment, share-stake acquisition, subscription to SOE's convertible bonds and finance leases, according to the guideline.
It added that private investors can band together or establish private equity funds with SOEs to invest in strategic emerging industries or make overseas investment.
The guideline requires SOEs to transfer property rights in a more open and transparent manner, by making the transaction at qualified property rights transaction centers through public bidding.
SOEs that are in the process of listing or issuing new shares should invite private investors to participate in the issuance, it said.
The guideline also urged SOEs to lift barriers that will block private investors from the transaction of SOEs' share-stakes and property rights.
This will give private capital access to fair competition as previously non-SOEs were always excluded in the bidding of SOEs' share-stakes and property rights, said Wang Zhigang, a researcher at the research center under SASAC.
Last week, China allowed private capital to enter the railway market, a traditionally strong state-controlled sector.
Drafting of detailed rules for private investment in the heavily state-controlled and monopolized power, oil and natural gas sectors is now under way.
The move is in line with other recent measures announced by the central government to stimulate the national economy while also opening the more heavily state-controlled and monopolized sectors to private investment.
A guideline, issued by the State-owned Assets Supervision and Administration Commission of the State Council yesterday, did not give details on how private capital could get involved in SOEs' restructuring, but provided some general directions.
Private investors can participate in the restructuring of SOEs through cash investment, share-stake acquisition, subscription to SOE's convertible bonds and finance leases, according to the guideline.
It added that private investors can band together or establish private equity funds with SOEs to invest in strategic emerging industries or make overseas investment.
The guideline requires SOEs to transfer property rights in a more open and transparent manner, by making the transaction at qualified property rights transaction centers through public bidding.
SOEs that are in the process of listing or issuing new shares should invite private investors to participate in the issuance, it said.
The guideline also urged SOEs to lift barriers that will block private investors from the transaction of SOEs' share-stakes and property rights.
This will give private capital access to fair competition as previously non-SOEs were always excluded in the bidding of SOEs' share-stakes and property rights, said Wang Zhigang, a researcher at the research center under SASAC.
Last week, China allowed private capital to enter the railway market, a traditionally strong state-controlled sector.
Drafting of detailed rules for private investment in the heavily state-controlled and monopolized power, oil and natural gas sectors is now under way.
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