The sole shareholder of Singapore's state investment firm, Temasek, is the city state's Ministry of Finance.

Sources in the decision-making process said earlier that when the shake-up of mainland state firms was complete, two new sets of companies would operate in much the same way as Temasek by channelling funds to SOEs and pressuring them to turn a profit.

But Peng said China's state economy was much bigger than Singapore's and state firms must be supervised by a state-asset investor rather than a government department. "We must not take a U-turn on reform," he wrote.

Peng said that after the reforms central government-owned conglomerates could be grouped into three categories: not-for-profit companies could remain the same; commercial firms with national security or strategic importance could be restructured into state-owned capital investment companies; and commercial enterprises could become state-owned capital operating companies.

Read more: How China's Singapore-like plan will 'boost growth' by shaking up state-run behemoths

All three could stay under the management of a state-assets supervision body, he said.

A separate article on Tencent Finance quoted anonymous sources as saying the Finance Ministry wanted to adopt the Temasek model and be in charge of all state-owned assets but Sasac was vying for the same role as the investor of state assets.

Beijing on Sunday detailed plans to reform SOEs, including the introduction of "mixed ownership" by bringing in private investment to revive inefficient state firms. At a Communist Party top reform steering group meeting chaired by President Xi Jinping yesterday, political leaders agreed that more private capital should be injected into state-owned enterprises.