MAINLAND companies in Hong Kong are to be scrutinised by Beijing as the authorities carry out a nationwide check of state assets.
The State Council, concerned by a growing drain of state assets into private or foreign hands, has authorised the National Administrative Bureau of State-owned Property to extend its investigation to Chinese companies in the territory.
Valuers said this was the first time a concerted effort had been made to appraise state assets held by Chinese companies outside of China.
'Hong Kong is a window for Chinese state enterprises to the outside world. All major state enterprises, through direct or indirect stakes, have interests in the colony,' said one valuer.
Local press reports said provisional regulations for controlling state assets held outside China were being drafted to provide a legal framework for the bureau investigation. In the meantime, it has established a unit to oversee checks on Chinese companies abroad.
The regulations will require Chinese companies to register the value of their state assets through proper valuation with the bureau and provide regular reports of how they are deployed.
The bureau decided to target overseas Chinese companies because many, like their parent enterprises back home, had weak accounting systems, lax control of state assets and made bad investments. Elsewhere, some cadres were found to be pocketing state assets.