The Agricultural Bank of China (ABC) yesterday set up an asset-management company, the third of the four big state banks to do so. Great Wall Asset Management had a registered capital of 10 billion yuan (about HK$9.3 billion) provided by the Ministry of Finance, and would take over a portion of the bad debts of the bank, ABC officials said. Wang Xingyi, president of the new company, said it would aim to recover the highest possible level of bad debt through restructuring and selling assets, debt for equity swaps, listing of assets and other means. 'We aim to make use of experience gained abroad and explore and innovate with ways suitable to actual conditions in China,' he said. ABC is the main bank for the mainland's vast rural economy. Officials said the key area of bad loans were those to township and rural enterprises, set up since the 1980s in rural areas, using surplus labour from the land. China Construction Bank set up the first asset-management company in April, named China Cinda, which has signed deals to exchange debt for equity in five companies. The second, China Oriental, was set up by the Bank of China on Friday. Both also have 10 billion yuan in registered capital. The last of the four big state banks, the Industrial and Commercial Bank of China, would set up Hua Rong Asset Management today with capital of 10 billion yuan, a report said. According to official press reports, 500 state companies have applied to swap their debt for equity and 108 will be chosen in the first batch. Economists welcomed the idea in principle but said the swaps must be implemented in line with market principles, saying the asset-management companies must take stakes only in companies with good management and products.