SOE reforms to improve flow of State capital

New mechanism to ensure more funding options for businesses with sound prospects

China will use independent State-asset investment and operating companies to ensure flexible capital flows among businesses and to reduce direct intervention in State-owned enterprises, as part of its proposed reforms for the sector, according to sources close to the matter.

Zhao Changwen, director of the department of industrial economy at the State Council Development Research Center, who has read the guidelines for SOE reform, said on Tuesday that the State-asset investment and operating companies, similar to asset-holding firms, would be commercially oriented investors and would not be replicas of the State-owned Assets Supervision and Administration Commission, an administrative agency that oversees 150,000 SOEs.