State Manufacturers Seek Overseas Public InvestorsMore State-owned manufacturers will open their doors to foreign investors by means of overseas public listings, Chinese leading economic advisers said Monday in Shanghai.They also closed ranks at the global forum, calling for the government to ease its control over foreign investors' access to State-owned capital restructuring, according to chinadaily.com.cn. Technological renovation, corporate management and bringing e-business to traditional companies were also vital to the future of State-owned firms, they said. Seeking overseas public listing has been a successful means of priming leading Chinese industrial groups for foreign competition, which is expected to flood into China once the country enters the World Trade Organization (WTO). "The listed firms have long been the biggest cash cow for the whole State business. They have a strong bottom line and can attract global investment in the stock markets," said Chen Qingtai, vice-president of the Development Research Centre of the State Council. State titans like China Unicom, the second largest telecom operator in China, and Sinopec, an oil conglomerate in China, have been wildly sought after in the foreign bourses. Speculation has surfaced that more giants from the steel, bank and telecom industries may be up for grabs for foreign investors. Chen said China will focus on propping up the giant industrial groups in key sectors by shutting down more insolvent State-owned firms trapped in an abyss of debt to ensure the efficient use of State funds. By doing so, Chen said large industrial groups would receive more funding and technology so they could compete on an international level, just as conglomerates in South Korea had done to make the country's economy the 11th most powerful in the world. "A key problem in China's State-owned businesses is that they are too far-flung. The core business has been diluted and the firms have lost their way," said Chen. The price was high. Big State firms lacked the funds and resources to achieve mass production, while the minnows became saddled with mountainous debts. There are about 230,000 firms in the State's charge. Although 70 per cent of their annual investment comes from bank loans allocated for industrial investment and one-third comes from an annual government budget for fixed asset investment, State-owned firms only produce half of the industrial value in China, said Chen. |
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