China to Be More Flexible in Handling Bad Assets

Foreign investors will soon be able to deal in non-performing assets of China's state-owned enterprises, said Zhu Dengshan, president of China Cinda Assets Management Cooperation.

This will be the quickest way for overseas investors to enter the China market and to participate in China's reform of state- owned enterprises, China Securities quoted Zhu as saying at the just-ended China Business Summit 2000 in Beijing. Zhu said more flexible measures will be taken so that overseas investors will be allowed to purchase stakes of Chinese enterprises held by Cinda.

Cinda has reached agreements of intention with dozens of overseas investors to cooperate in this field, the daily said. By the end of last month, Cinda had signed contracts with 90 state-owned enterprise on debt-equity conversion, involving assets value of about 70 billion yuan (US$ 8.34 billion). Zhu predicted that a total of 140 state-owned enterprises will be taken into the debt-equity conversion process by the end of this month, with their total assets estimated at 120 billion yuan. Cinda was founded on April 20 last year, responsible for management of bad assets separated from China Construction Bank, one of the four major commercial banks in China.

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