Bloomberg reported that China’s government announced a large-scale reform of state-owned enterprises (SOE). The reform aims to attract private investments in the public sector and reorganize “zombie companies”.
“Zombie companies” are ailing enterprises hovering on the verge of bankruptcy, so they rely on regular bailouts from the state. The government program is expected to affect tens of thousands of such companies. The State-owned Assets Supervision and Administration Commission of the State Council (SASAC), which manages operation of more than 100 large state-owned companies of China, will be also streamlined as part of the program.
China’s authorities have not disclosed details of the reorganization. The new foreign investors’ policy is supposed to attract private capital in various sectors, from transport and energy to telecommunications. According to estimates by the State Council, the reform of state-owned companies can increase the growth rate of China's GDP by at least 0.33% a year.
