Sinopec stake sale signals move to privatise state-owned enterprises

The mainland's decision to sell a stake in a subsidiary of Sinopec signals more privatisation of its bloated state-owned sector will take place soon, with plans likely to be discussed at this week's parliamentary session, officials and experts said.

Sinopec, Asia's biggest oil refiner, said on February 20 that it would sell up to 30 per cent of its marketing arm, which owns more than 30,000 petrol stations, in a multibillion-dollar asset restructuring.

It was China's first announcement of a major restructuring since President Xi Jinping unveiled sweeping reforms of the economy at a Communist Party conclave last November.

He promised to encourage more private participation in state-owned enterprises (SOEs), which include some of the world's largest companies.

"Reform towards fully mixed ownership will increase, in such areas as petroleum and petrochemicals, power and telecommunications," said Zhang Chunxiao, an adviser at the State-Owned Assets Supervision and Administration Commission (Sasac).

Sasac is a ministerial-level body run by China's cabinet and is directly responsible for 113 state-owned companies, including Sinopec, four giant banks, oil giants PetroChina and CNOOC, and China Mobile.

Beijing will, however, retain control of critical lifeline industries, including enterprises related to national security and key economic sectors - upstream energy, transport and ports - Zhang said.