China will set up asset-management companies (AMCs) as a platform to push forward the restructuring of State-owned enterprises (SOEs) next year, a senior official said yesterday.

"The conditions for establishing asset management companies are ripe," Li Rongrong, director of the State-owned Assets Supervision and Administration Commission (SASAC), said at a press conference in Beijing.

According to Li, the property rights of SOEs have been clarified and corporate governance is at the forefront of reforms, which has created a suitable environment for AMCs.

SASAC has completed drafting a plan for SOE restructuring and State asset distribution, and AMCs will be in charge of implementation.

Two central SOEs were appointed by SASAC as trial AMCs Chengtong Group in June and State Development & Investment Corp in December and they have begun taking over loss-making SOEs.

New models of asset management will also be explored, Li added, but did not provide details.

China has about 138,000 SOEs, which employ 43 million people. Li's commission is responsible for 169 SOEs affiliated to the central government, which provide jobs for 10.53 million.

In the past few years, between 4,000 and 5,000 SOEs have been restructured; and Li said the efforts have been rewarded as net profits of SOEs have increased substantially.

The 169 enterprises under SASAC achieved estimated sales of 6.6 trillion yuan (US$825 billion) in 2005, up more than 21 per cent year on year.

And the net profits of these enterprises are expected to reach 600 billion yuan (US$75 billion) this year from last year's 480 billion yuan (US$60 billion), up 20 per cent.

Earlier reports said that the 169 companies contribute some 60 per cent of the tax revenues collected from SOEs.

Li also disclosed that China National Coal Group, the country's top coal exporter, would probably be listed in 2006.

At the conference, Li said China National Petroleum Corporation (CNPC) should take "leadership responsibility" for the explosion at its Jilin Petroleum and Chemical Company, which caused about 100 tons of pollutants containing hazardous benzene and its derivatives to leak into Northeast China's Songhua River.

"But Jilin Petroleum and Chemical Company should take major responsibility for the accident and its aftermath," said Li.

Three executives of the company held responsible for the explosion have been sacked and former State Environment Protection Administration minister Xie Zhenhua resigned owing moral responsibility.

At yesterday's conference, Li also warned that the heads of major SOEs could be sacked "once they are found to be underperforming."

Source: China Daily