On August 21st, the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) announced that, with the approval of the State Council, China Light Industry Group Corporation and China National Arts & Crafts (Group) Corp. would be merged into China Poly Group Corporation, becoming wholly-owned subsidiaries of China Poly Group. China Light Industry Group Corporation and China National Arts & Crafts (Group) Corp. would no longer be directly supervised by SASAC.
Li Jin, Director of the Research Institute of China Enterprise Voice, visited Poly Group and believed that from an industrial perspective, the merger of Poly Group with China Light Industry and China National Arts & Crafts was determined by internal merger factors for corporate development and was reasonable.
Public information shows that the main business of China Light Industry Group Corporation is the development and application of raw materials and products in the light industry. Meanwhile, China Poly Group Corporation has already formed a "five-wheel drive" development pattern, mainly focusing on the trade of military and civilian products, real estate development, cultural and artistic operations, investment and development in the field of mineral resources, and civilian explosive technology.
"Poly Group has always wanted to strengthen its cultural sector. Among central enterprises, there are fewer cultural sector enterprises, and China National Arts & Crafts is in line with Poly's requirements to strengthen its cultural sector. The same applies to China Light Industry; in terms of trade, it can complement Poly's strengths," Li Jin said.
It is worth mentioning that Poly Group is also one of the eight state-owned capital investment companies. Li Jin believes that an important task of the pilot work of state-owned capital investment companies is to promote the reorganization and integration of related industries and businesses, enabling state-owned capital to enter and exit, and improving the efficiency of state-owned capital allocation. Poly Group is fulfilling its responsibilities as a state-owned capital investment company.
Diversified and international large central enterprises integrating assets with smaller, overlapping businesses are a new trend in central enterprise restructuring. In fact, the restructuring of these three central enterprises has been brewing for some time. As early as March 21 of this year, China Hai Cheng issued a public announcement stating that its controlling shareholder, China Light Industry Group, and Poly Group planned to carry out a restructuring. The overall property rights of China Light Industry Group would be transferred to Poly Group without compensation, and the company's actual controller might become Poly Group.
Through this restructuring, the number of central enterprises supervised by SASAC has been reduced to 99, marking the first time that the number of central enterprises in China has fallen below 100.
When the State-owned Assets Supervision and Administration Commission was established in 2003, there were a total of 196 central enterprises. Since then, the pace of restructuring and integration of central enterprises has steadily increased. Especially since the 18th National Congress of the Communist Party of China, the pace of restructuring central enterprises has accelerated. Although the number of central enterprises has decreased, their asset size has steadily expanded, and state-owned capital has been concentrated in important industries, key areas, forward-looking strategic industries, and leading enterprises.
According to Li Jin, in the past, China mostly adopted the method of merging central enterprises as a whole, usually involving mergers with high levels of business overlap. Now, making one central enterprise a wholly-owned subsidiary of another central enterprise can reduce resistance to central enterprise restructuring.
It is understood that central enterprise restructuring is not about reducing the number of companies, but rather focusing on the essence and effectiveness of the restructuring. Since the restructuring, resource allocation efficiency has been effectively improved, operating costs have significantly decreased, the benefits of related enterprises have greatly increased, and their industry status and influence have significantly improved. In the next step, SASAC will accelerate the pace of deep adjustment and restructuring in accordance with the principle of "maturing one company and promoting one company," focusing on strengthening central enterprise group-level restructuring. It will also promote restructuring in fields such as coal and electricity, heavy equipment manufacturing, and steel. Furthermore, it will explore the integration of overseas assets, concentrate resources, and generate synergy for better results. On one hand, it will continue to promote restructuring at the central enterprise group level and steadily promote restructuring in areas such as coal, electricity, heavy equipment manufacturing, and steel. It will also explore the integration of overseas assets, concentrate resources, and generate synergy for better results. On the other hand, it will promote central enterprises to use leading enterprises and listed companies as platforms to strengthen the resource integration of enterprises in the same business sector. It will encourage central enterprises to focus on development strategies, with an emphasis on obtaining key technologies, core resources, well-known brands, and market channels. Actively carry out mergers and acquisitions and restructuring, improve industrial concentration, and promote quality and brand enhancement. It supports central enterprises in concentrating resources on leading enterprises and core businesses through asset restructuring, equity cooperation, asset replacement, free transfer, strategic alliances, joint development, and other means.
"In my opinion, it is entirely reasonable to expect the number of central enterprises to be reduced to within 90. There is no suspense; it's just a matter of time," Li Jin said.
Source: Huaxia Times
Original link: http://t.cn/RCXvng9
