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4 Chinese metals majors named to lead state-owned enterprises reform

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4 Chinese metals majors named to lead state-owned enterprises reform

,Baosteel Group Corp.,Wuhan Iron & Steel (Group)Corp. and have beenselected under a list of seven state-owned enterprises to lead theestablishment of state-owned capital investment companies, China Securities Journal reported July 14, citing the State-ownedAssets Supervision and Administration Commission, or SASAC.

Thereport cited Peng Huagang, deputy secretary general with SASAC, as saying thatthe commission will grant more rights to these companies to deepen reformsamong state-owned enterprises, or SOEs.

Theterm state-owned capital investment companies was defined for the first time inan official statement from the country's State Council in November 2015, inwhich the country's cabinet said the SASAC will delegate its power to selectedinvestment companies.

Thesecompanies are expected to become shareholders of other SOEs and to managestate-owned assets on behalf of SASAC, while the commission will focus on itsregulatory function withless participation in the company's day-to-day operations.

Amongthe four mining companies in the news, Shenhua Group is expected to reforms in domestic coalsector by taking over coal mines owned by central government-controlled companies.

BaosteelGroup and Wuhan Iron &Steel Groupannounced a restructuringprogram, which will possibly result in a merger between the twosteel majors. The new company isexpected to replaceHesteel Co. Ltd. asthe largest steel producer in the country.

ChinaMinmetals announced astrategic restructuring deal in December 2015 to take over state-ownedconglomerate China MetallurgicalGroup Corp.

The other companies named in the pilot are China MerchantsGroup, China Communication Construction Group and China Poly Group Corp.