BEIJING -- The strategic restructuring of Sinosteel Group Corporation Limited and China Baowu Steel Group Corporation is of great significance to the layout and modernization of China's iron and steel industry, an official said Friday.

Weng Jieming, deputy head of the State-owned Assets Supervision and Administration Commission of the State Council, made the remarks during the restructuring ceremony of the two giant steelmakers.

After the process is completed, Beijing-based Sinosteel will become a wholly owned subsidiary of China Baowu.

Chen Derong, chairman of China Baowu, said the two companies will carry out multiple measures regarding debt restructuring, business integration and managerial changes, and will ensure that their potential for coordinated development is fully tapped.

Formed after the reorganization of the former Baosteel and Wuhan Iron and Steel in 2016, China Baowu is the world's largest steelmaker, with crude steel output hitting 120 million tonnes in 2021. It has carried out a series of restructurings in recent years.

Established in 1993, Sinosteel is mainly engaged in developing and processing metallurgical mineral resources, trading and logistics of metallurgical raw materials and products, and related engineering technical services and equipment manufacturing, according to the company's website.