Economic Policy News
- Rules tightened on asset sales
Date: 31-Jan-2007 Sources: (Shenzhen Daily)
CHINA'S State assets regulator has issued rules requiring the sale of State-owned assets to foreign companies to take place publicly on property rights exchanges and be based on government-approved valuations.
The rules, outlined by the State-owned Assets Supervision and Administration Commission (SASAC) in a statement posted on its Web site Monday, follow concerns foreign companies have been buying State assets too cheaply.
China has property rights exchanges in most of its major cities.
The statement, dated Dec. 31, 2006, said the government will 'strictly limit 'private negotiations for the sale of State assets. For any private negotiations approved by the SASAC, the transactions must comply with the country's industrial policies.
Buyers of State assets must offer 'obvious advantages in upgrading State enterprises and improving their technology,'it said.
The regulator stressed the government should retain controlling stakes in State-owned enterprises in industries considered key to the country's economic security. It didn't identify the sectors.
In late December, vice chairman Zhang Xiaoqiang at the National Development and Reform Commission said the economic planning agency would work on creating a list of strategic and sensitive sectors to help ensure foreign investment complies with the country's security and economic goals.
Concerns foreign companies have been buying State assets cheaply have delayed several deals. In a well-known example, Carlyle Group LP's revised bid for a stake in Chinese construction machinery producer Xugong Group Construction Machinery Co. is still awaiting regulatory approval, according to a report by the Xinhua news agency in November, which cited unnamed sources.
Sponsor Results:
