China is looking for foreign investment in its larger state-owned enterprises (SOEs).
According to Reuters, the SOEs have been undergoing reforms since 2016 in an effort to make them more competitive. Some of the changes include introducing private capital, putting an end to overcapacity, shutting down “zombie” subsidiaries and restructuring assets.
Foreign firms should “actively participate in reform and development of central enterprises, and jointly explore ways of deep cooperation including mixed-ownership,” Xiao Yaqing, chairman of the State-Owned Assets Supervision and Administration Commission (SASAC), announced on the regulator’s website.
In addition, SASAC is in favor of investment by state giants in private and foreign firms, but Xiao did not provide any additional details.
Back in August, the banking and insurance regulator in China issued changes to enable more foreign investments in the country’s financial industry. The new rules would enable 51 percent ownership of brokerage firms and life insurance companies, with the cap eliminated in 2021. In addition, other restrictions were eased to promote a flow of investments into the Chinese financial sectors. People’s Bank of China (PBOC) Governor Yi Gang said that that changes would allow foreign firms to compete against local companies on equal footing, while Chinese-based companies in the financial sector would give more business to the foreign banks within the country.
In March, Gang also spoke about how opening up China’s financial sector will result in progress. “History has proved that areas that are more open are more competitive, and areas that are less open are less competitive and see risks accumulating (as a result),” he said, adding that there is still an emphasis on controlling risk.
“We will put equal emphasis on the opening up of the financial sector and prevention of financial risks,” Gang said. “The opening up of the financial sector must be accompanied by the development of financial regulation.”