Shanghai municipal government is considering a plan to restructure four key state-owned holding companies into two, one focused on the financial sector and the other on industrial assets. Through the reshuffle, which needs approval, it hopes to create two more market responsive firms that are not tied to the municipal bureaucracy, can pay competitive wages, and can help in solidifying its position as the nation's financial capital. In the plan, state-owned Shanghai International Group, which directly and indirectly holds substantial stakes in Shanghai Securities and Shanghai Pudong Development Bank, would take over all the assets and employees from sister holding company Shanghai State-owned Assets Operation Co, becoming the city's financial conglomerate, a municipal government source said. Control of Shanghai International would then be transferred to the Shanghai State-owned Asset Supervision and Administration Commission from the Shanghai Bureau of Finance. 'The possibility of transferring all the shares of Shanghai International Group to [the commission] as part of the plan, may not be a sure thing,' said the source. The final version of the plan had not been decided yet, the source said. 'Xi Jinping, the new Shanghai party secretary, won't make such an important decision so quickly.' Professor Pan Yingli of Shanghai Jiao Tong University, who drafted the Eleventh Five Year Plan research project on building Shanghai into an international financial centre, said yesterday: 'A financial holding company can help Shanghai's financial institutions fend off the administrative noises caused by a still conservative state-owned asset management system, and allow them to operate in a more market-oriented way.' 'This is very important for Shanghai's ability to compete as a financial centre,' she added. In the other half of the reshuffle, Shanghai Dasheng Holdings, set up to support state-owned high-technology projects, and Shanghai Dragon Investment, which was formed with a goal to fund government-sponsored institutions such as schools, will be merged into another as-yet-unnamed holding company.