Center

Capital budget for State-owned enterprises sought in 2007

By Xin Zhiming (China Daily)
Updated: 2007-01-26 08:51

The State asset management body said yesterday it would try to establish a capital budgetary system for enterprises directly controlled by the government this year.

"We have had numerous negotiations with the Ministry of Finance (MOF) and have been actively preparing for (the system)," said Li Rongrong, director of the State-owned Assets Supervision and Administration Commission (SASAC).

Related readings:  Investors turn to traditional sectors Less budget fund misused in 2006Beijing bus system to receive capital injection

He made the comments during yesterday's national work conference on State-owned assets management. The conference closes today.

The State Council has already given its approval to SASAC to set up a new company to manage State-owned assets, according to a report by the China Securities Journal.

The new budgetary regime for State capital is expected to require State-owned enterprises to hand over some of their profits.

The commission may use some of that money to help replenish the capital of under-funded State enterprises or finance the exit of State companies from competitive sectors, Shao Ning, SASAC's deputy director, said in December.

The funds can also be used for investment to appreciate the value of State assets.

The move is in line with the national strategy since 1997, when the Party held its 15th National Congress and decided to adjust the layout of its State enterprises.