Others News
- Govt. to let foreignersbuy into defense firms
Date: 28-Dec-2007 Sources: (Shenzhen Daily)
THE government would allow foreign investment in its defense sector, except for enterprises controlled by the State, while encouraging defense firms to raise funds through stock market listings, a senior official said yesterday.
China would also encourage domestically listed, State-controlled companies to acquire and reform defense firms, said Wu Fenglai, head of the reform department at the Commission of Science Technology and Industry for National Defense, in a commentary published in the China Securities Journal.
'Encouraging enterprises to enter market competition and to expand with aid from the equity market is an important way to help them develop,'Wu wrote.
He said defense firms in which the State was not a controlling shareholder should collectively aim to raise 50 billion to 60 billion yuan (US$6.8-8.2 billion) from share listings by 2010.
China's defense sector supplies the full range of equipment, from fighter jets and tanks to uniforms, to China's military force of more than 2 million personnel.
Some big military corporations have already spun off their civilian product businesses for stock market listings.
Wu noted that Jiangnan Heavy Industry Co., part of China State Shipbuilding Corp. which builds both naval and civilian vessels, had raised 7 billion yuan through an IPO.
But he added that foreign investment would in principle be barred from defense enterprises controlled by the State, unless a foreign strategic investor could enhance the innovative, managerial and competitive ability of an enterprise.
Sponsor Results:
