China Begins New Trials in Push to Reform State-Owned Companies

  • China Chengtong Holdings Group, China Reform Holdings in trial
  • Other companies to be added later to the trials, Xinhua says

China will begin a new round of reform trials for companies owned and managed by the central government, testing changes that will affect mergers, salaries, employee shareholding and corporate restructuring, the official Xinhua News Agency reported.

Ten trials were announced on Thursday at a briefing by Zhang Xiwu, deputy director of the State-owned Assets Supervision and Administration Commission, and representatives of other government agencies. China Chengtong Holdings Group and China Reform Holdings Corp. were selected to be included in the trials, Xinhua reported, noting that other companies would be selected and added later.

As China seeks to re-energize its slowing economy, it has been experimenting with a range of reforms to lessen its dependence on bloated and inefficient-state owned enterprises. Earlier reforms have encouraged more private-sector mixed ownership of state-owned companies. Some economists have warned that reforms could put a further drag on economic growth in the short term and have been closely watching the pace of reform efforts.

Among the trials announced on Thursday were plans this year to increase restructuring and mergers of central-government run state enterprises, the report said. Other trials were broadly described as involving state asset investments, board functions, salary distribution and employee shareholding.

— With assistance by Ken Wills

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