SOE reforms get Chengtong boost

China Chengtong Holdings Group Ltd, an asset manager under the State Council, plans to bring in more private capital to finance the mixed-ownership reform of the country's State-owned enterprises, a top official said on Friday.

As part of this, the group will continue to set up investment funds to encourage cross investment between the State-owned and private sectors.

China Chengtong is a pillar centrally controlled State-owned enterprise under the supervision of the State-owned Assets Supervision and Administration Commission with assets totaling 100 billion yuan ($15.7 billion). The group's major business includes equity operation, financial services, asset management and integrated logistics.

"The group will encourage private capital to participate in the ongoing mixed ownership reform, especially in non-listed companies," said Li Yousheng, vice-president of the group.

China Chengtong has conducted three asset restructurings for China Logistics Co Ltd, one of its subsidiaries over the past five years. It has introduced capital from Sichuan Communications Investment Group Co Ltd, Luzhou Laojiao Co Ltd and Wuhan State-Owned Assets Management Ltd Co, according to Li.

These moves have brought 3.36 billion yuan into China Logistics, with non-State-owned assets accounting for 29.79 percent of the total.

Li said China Chengtong will also facilitate the integration of State-owned assets and private capital to further diversify the development of China's SOEs.

Under the government policy, State-owned investment and operation companies need to make best use of their capabilities and invest in non-State-owned companies with great potential through equity investment.

"The State-owned capital management companies are keen to invest in the private sector, especially in the emerging industries," said Li. "On the other hand, we found a growing number of social capital wants to participate in the SOE businesses. And it has been proved that investment funds are an efficient way to benefit both sides."

Under the State Council's guidelines, the group has invested 12.9 billion yuan in China Unicom's mixed ownership reform project through China Structural Reform Fund Corporation Ltd, which has made it the third largest shareholder of China Unicom.

"China Chengtong will team up with other investors including Baidu, Alibaba and Tencent to help China Unicom develop in cloud computing and big data," Li said. "More important, through the fund investors can share the opportunity to participate in SOE reforms."