China has worked out a plan to prop up consolidation of companies in some important fields, including automobile, rare earth and machineries, the government said.
The State Council’s official website, www.gov.cn, said in a statement that the government will encourage merges and acquisition in the automobile, cement, steel, machinery, rare earth and aluminum industries.
The government will remove rules that restrict cross-regional mergers and acquisitions, according to the statement.
Local governments may sign agreements on splitting revenue from companies formed through cross-regional mergers and acquisitions, according to the statement.
Meanwhile, the government will also encourage the entry of private capital into industries from which it isn’t banned and also allow private capital to hold larger stakes in companies, the statement said.
&$&$By People’s Daily Online&$&$
Original post:
China to promote M&A in steel, auto and machineries
Reforms started in the late 1970s with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment.
The government vowed to continue reforming the economy and emphasized the need to increase domestic consumption in order to make China less dependent on foreign exports for GDP growth in the future.
The country’s per capita income was at $6,567 (IMF, 98th) in 2009.
Nevertheless, key bottlenecks continue to constrain growth.
The two most important sectors of the economy have traditionally been agriculture and industry, which together employ more than 70 percent of the labor force and produce more than 60 percent of GDP.
China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories.
