The anticipated arrival in Toronto of an office of the China Investment Corporation, described among other places in the January 12 Globe and Mail, is by now a well-known and much-anticipated fact. The CIC is reported to have up to $300 billion to place around the world.
Shanghai Securities News reported in late December that the Chinese government was setting up what’s being called the second CIC, Guoxin Asset Management Corp, another State-owned asset management company wholly owned by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC).
The company is expected to speed the consolidation of State-owned firms and turn unprofitable State-owned enterprises (SOEs) into money-making entities to meet the listing requirements of domestic stock exchanges.
According to reports, the company is expected to restructure between 20 and 30 small-sized SOEs, with the aim of reducing the 123 SOEs currently under central government control to 80-100 in 3 to 5 years. China’s central SOEs reported profits of 723.55 billion yuan ($107.83 billion) in the first eight months of this year, up 50 percent year-on-year, according to the SASAC.
“The move to launch Guoxin Asset Management Company is aimed at speeding-up restructuring State-owned assets and cutting the number of central SOEs,” said Liang Xiaomin, an expert on SOEs at Beijing Technology and Business University, reported in China Daily November 17.
Once established, Guoxin Asset Management Company will be the third asset-management company under SASAC. Similar entities to Guoxin Asset Management Company are China Chengtong Group and State Development and Investment Corp.