| |
 |
Private firms allowed to control SOEs
|
IN what could be a landmark policy, municipal authorities say private firms will be allowed to hold controlling interests in the city's State-owned enterprises (SOEs).
The policy is part of a reform package released by the Municipal Committee of the Communist Party of China and the Municipal Government to give private firms more freedom while placing them on equal footing with SOEs and foreign-funded firms.
Under the new rules, the restriction on residency of self-employed individuals and private firm owners will be lifted. Business scopes are broadened to individual businessmen and private firms who will be allowed to engage in any activities except those expressly prohibited by law.
The government will also strengthen its support for private enterprises which restructure themselves into joint stock companies and seek listing in the stock market.
In order to encourage these companies to develop into export-oriented and high-tech conglomerates, the government has lowered the benchmark for creating groups of companies. A core private company that has a registered capital of at least 50 million yuan (US$6 million) and has controlling interests in five or more subsidiaries could apply to establish a group company.
The government repeated its support for private firms to participate in SOE ownership reform. But in a surprise move, it said private companies will be allowed to hold controlling shares in SOEs.
Private businessmen are given incentives to employ laid-off workers, and offered the same tax rates as SOEs and foreign-funded firms if they invest in the projects encouraged by the government.
(Alfred Zhang)
|
|
|
|
