-
Advertorial
-
FOCUS
-
Guide
-
Lifestyle
-
Tech and Vogue
-
TechandScience
-
CHTF Special
-
Nanhan
-
Futian Today
-
Hit Bravo
-
Special Report
-
Junior Journalist Program
-
World Economy
-
Opinion
-
Diversions
-
Hotels
-
Movies
-
People
-
Person of the week
-
Weekend
-
Photo Highlights
-
Currency Focus
-
Kaleidoscope
-
Tech and Science
-
News Picks
-
Yes Teens
-
Fun
-
Budding Writers
-
Campus
-
Glamour
-
News
-
Digital Paper
-
Food drink
-
Majors_Forum
-
Speak Shenzhen
-
Business_Markets
-
Shopping
-
Travel
-
Restaurants
-
Hotels
-
Investment
-
Yearend Review
-
In depth
-
Leisure Highlights
-
Sports
-
World
-
QINGDAO TODAY
-
Entertainment
-
Business
-
Markets
-
Culture
-
China
-
Shenzhen
-
Important news
在线翻译:
szdaily -> Business
Funds of State firms face closer oversight
    2017-September-26  08:53    Shenzhen Daily

THE government will create a centralized financing company to oversee some US$304 billion in funds held by China’s State-owned enterprises’ (SOEs) finance units, sources familiar with the matter said. This will allow the government closer supervision of SOEs’ borrowing and investment activities.

The plan, approved by the State Council, will increase the government’s ability to supervise the non-financial SOE finance companies’ investments, giving the entity a fuller picture of how these companies are using funds, according to the sources.

Non-financial SOEs have their own finance units that currently offer various products and services such as deposits and loans, and the new entity could facilitate those efforts. The plan would assist regulators by directing some 2 trillion yuan (US$304 billion) in funds held by the non-financial SOEs through the new company, meaning they could monitor the flow through only one financing company rather than dozens.

Many details about the new entity were not immediately clear, such as who would control it, how much regulatory and oversight authority it would have, and how it might conduct external financing on behalf of the SOEs.

The aim is to boost efficiency in the US$20 trillion State sector in line with a government campaign to reduce the companies’ debt, according to the sources. While the new finance company would have a regulatory oversight role, the SOEs would retain control over their funds, the sources said.

China Chengtong Holdings and China Reform Holdings, two companies facilitating the nation’s plan to overhaul the State sector, have been tasked with setting up the new company, two of the sources said. It would coordinate business cooperation between companies, cut costs, reduce debt and promote other financial ties between State firms, they said.

The plan applies to companies regulated by the State-owned Assets Supervision and Administration Commission but not to banks and brokerages that are overseen by other agencies.

The move, which is intended to make it more efficient for SOEs to borrow money and to cut operational costs, coincides with governmental efforts to crack down on debt in the State sector and to reduce risks to the broader economy. At a key financial meeting in July, President Xi Jinping said deleveraging at SOEs was of utmost importance.

Some of the SOEs, such as China Mobile Ltd. and PetroChina Co., are among the world’s biggest companies. State-owned enterprises command about 40 percent of China’s industrial assets and create nearly 20 percent of urban employment.

Nearly all State companies, from China Petrochemical Corp. to China Baowu Steel Group, have their own finance companies. State companies have hundreds of subsidiaries across the country.

The more than 240 finance companies controlled by central and local governments across the country, which serve 60,000 firms in 17 industries spanning oil, power, petrochemicals and auto, cut a combined 70 billion yuan in costs in 2015 alone, helping their conglomerates combat slower growth, according to data from the industry association.

Lower funding costs promise to bolster profitability of State-owned enterprises that remain a key driver of the world’s second-largest economy and reduce leverage in a bloated sector that accounts for 60 percent of corporate debt to the nation’s financial industry, according to UBS Group AG.(SD-Agencies)

深圳报业集团版权所有, 未经授权禁止复制; Copyright 2010, All Rights Reserved.
Shenzhen Daily E-mail:szdaily@szszd.com.cn