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China state assets regulator says debt reduction, curbing risks still key

Reuters  |  BEIJING 

(Reuters) - Reducing and curbing risks remain priorities for China's state-owned firms, the of the country's state assets regulator said on Saturday, as continues its restructuring and efforts.

Xiao Yaqing, of the (SASAC), also told reporters on the sidelines of China's annual meeting of parliament that proposed overseas investments by Chinese state companies should be reviewed "fairly".

"Chinese enterprises, especially state-owned enterprises, are independent market players first," Xiao said. "You can't scrutinize this type of investment more vigorously, while scrutinizing other types of investment more loosely."

In recent months, outbound investment by China's state-owned enterprises (SOEs) has been increasingly scrutinized by foreign governments.

The has blocked several high-profile deals amid rising trade tensions between and Washington, while European leaders agreed last year to consider screening investments by state-owned Chinese firms.

The value of overseas assets held by China's central government-controlled enterprises reached 7 trillion yuan ($1.1 trillion), Xiao said, with investments in more than 185 countries and regions.

The characterized further internationalization by state firms as "inevitable and completely understandable".

State firms, at home, would be pushed to improve their asset quality and boost their equity capital, Xiao said.

The regulator would seek to use debt-for-equity swaps to further reduce at state-owned companies, he added.

In 2015, Beijing introduced reforms to its state-owned industrial sector aimed at strengthening central government-owned enterprises, while introducing more professional management systems such as the adoption of boards of directors.

Xiao said those reforms would quicken this year, along with increased oversight by SASAC of enterprise activities.

The sector reported a rebound last year, with enterprises owned by China's central government showing profit growth of 15.2 percent, to 1.4 trillion yuan, the fastest in five years.

Total profit from China's central government-owned firms for the first two months of 2018 rose 22.6 percent from a year earlier to 266.7 billion yuan, Xiao said.

One important element of China's state sector plan has been merging the giant state behemoths, in an attempt to create large, globally competitive conglomerates.

has already cut the number of SASAC-controlled conglomerates to 98, from 117 five years ago, following key mega-mergers in the power, and

Sixty-seven central SOEs were on the 500 list in 2017.

($1 = 6.3285 Chinese yuan/renminbi)

(Reporting by Xiaochong Zhang, Matthew Miller and Shu Zhang; Writing by Se Young Lee; Editing by and Dale Hudson)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Sat, March 10 2018. 16:12 IST