Beijing has given the all-clear for a long-awaited plan to break the monopoly of government-controlled industrial giants, putting out a guideline that encourages private investment in state-owned enterprises (SOEs).
The State-owned Assets Supervision and Administration Commission (Sasac) said yesterday that the bias against the mainland's private investors would be removed when state-owned firms wish to sell stakes or seek capital infusions.
Though the guideline provides few details as to how private investors can participate in the strategically significant privatisation push, it represents a bold step by the central government to overhaul the world's second-largest economy.
Sasac said it would promote the injection of private funds into the major SOEs, sending a message to cash-rich entrepreneurs that the government welcomes their money as part of its efforts to reform state-controlled sectors such as telecoms, oil exploration and coal mining.
Private funds would be allowed to 'contribute cash, buy equities, purchase convertible bonds or lease equipment to get involved in the restructurings of SOEs', Sasac said in a statement. 'The guideline reflects equal treatment of various kinds of investors and it helps ensure fairness in economic development.'
Beijing has a tight grip on heavy industries that are the backbone of the national economy.
Major state-owned industrial giants including China Mobile and PetroChina have benefitted greatly by being monopolies in the mammoth mainland market, with the government having a final say on the pricing of their products.
