The State Economic and Trade Commission is finalising a list of state-controlled public companies to launch an experiment by Beijing to cut government stakes in non-key industries. Sources said the list was expected to be released by December, and marks a key move by the state to restructure rotten state enterprises by reducing inefficient intervention in the economy. 'The commission has compiled a preliminary list of listed state companies for the experiment, which should be out by the end of the year,' a source said. This came as China Securities Regulatory Commission chairman Zhou Zhengqing confirmed market rumours that Beijing would allow some state companies to pilot the scheme. 'We will choose some state-controlled listed companies with a good reputation and have strong potential to sell state shares to raise funds, provided this does not affect the state's majority control [in these companies] and the stability of the market,' he told Xinhua. He did not elaborate. A broad agreement to reduce state control in non-strategic industries was reached at the Chinese Communist Party's central committee's fourth plenum last month. The state, through various holding companies and government institutions, controls between 60 per cent and 70 per cent of the 900-plus listed companies on the Shanghai and Shenzhen stock exchanges. The plan should have sent investors running for cover, but Mr Zhou sweetened it with the news that some B and H-share companies would be allowed to buy back shares. 'Some B-share companies have been asking Beijing to give them the right to buy back shares. Now, Mr Zhou has agreed a pilot scheme may be carried out,' one analyst said. B shares, created for foreign investors, have been languishing because they are perceived as a group to be illiquid. Most of the 107 B-share companies are trading below their issue price.