BEIJING -- The State Council, or China's cabinet, unveiled a guideline for reforming the management of the country's colossal State-owned assets on Wednesday.

The guideline specified plans to establish an investment firm to manage the state's capital and restructure State-owned enterprises (SOEs). It was a supporting document for another State Council guideline on advancing SOE reforms released in September.

China will set up a firm in charge of capital investment and operations by either transferring state equities and budgets to a new company or by transforming a qualified wholly State-owned enterprise that already exists, according to the guideline.

The firm can increase the value of state capital by managing equity, management staff and fund movements or optimizing layout through investment and financing, industrial support and capital integration.

The country will also accelerate elimination of outdated and excessive capacity for SOEs and dispose of inefficient assets. State capital will be removed from some SOEs, while others will be restructured or upgraded on the basis of innovation.

The newly distributed capital will be concentrated in key sectors, major infrastructure, forward-looking and strategic industries, key areas in the industrial chain and firms with strong competitiveness.

In the process of establishing the investment firm and restructuring SOEs, the government will transfer some state equity into the hands of social security funds, so that proceeds from those equities can be used to make up a shortfall in pension funds, the guideline said.