China has authorised two relatively unknown asset exchanges in Beijing and Shanghai to sell state-owned enterprises (SOEs) in an attempt to speed up the disposal of state assets, according to officials involved.
Beijing's Technology and Equity Exchange had begun selling 104 companies owned by the municipal government, officials said.
In addition, the four asset management companies responsible for selling non-performing loans on behalf of China's Big Four state banks signed a contract last month to post their non-performing loan portfolios at the two equity exchanges. The Beijing exchange lists NPLs with a face value of 10 billion yuan (HK$9.29 billion).
This new sales channel was set up by the State Owned Assets Supervision and Administration Commission (Sasac) in October after the third plenum of the 16th Communist Party Congress.
Sasac director Li Rongrong recently said state firms might transfer ownership through mergers and acquisitions with non-state and foreign firms - exactly what the unofficial exchanges are designed to facilitate.
Dong Tao, China economist at Credit Suisse First Boston, said the slow pace of initial public offerings by Chinese companies was one factor forcing authorities to find new ways of selling off state enterprises.
China has also been seeking to offload about US$500 billion in bad loans from the banking system through auctions organised by the asset management companies. However, the paucity of buyers and the sometimes overly complex auction system has slowed the process to a crawl.