China's Sinopec Sale Points to Next Round of State Privatization

Reuters

BEIJING, March 4 (Reuters) – China's decision last month to sell a stake in a subsidiary of Sinopec Corp signals more privatisation of its bloated state-owned sector will take place soon, with plans likely to be discussed at this week's parliament session, officials and experts said.

Sinopec, Asia's biggest oil refiner, said on Feb. 20 that it would sell up to 30 percent of its marketing arm, which owns more than 30,000 petrol stations, in a multi-billion dollar asset restructuring. No details have been provided.

It was China's first announcement of a major restructuring since President Xi Jinping unveiled sweeping reforms of the socialist economy at a Communist Party conclave last November. He promised to encourage more private participation in state-owned enterprises (SOE's), which include some of the world's largest companies.

"Reform towards fully mixed ownership will increase, in such areas as petroleum and petrochemicals, power and telecommunications," said Zhang Chunxiao, an adviser at the State-Owned Assets Supervision and Administration Commission (SASAC).

"State-owned enterprises will look to attract high-calibre strategic investors, including foreign capital," he told Reuters.

SASAC is a ministerial-level body run by China's cabinet and is directly responsible for 113 state-owned companies, including Sinopec, oil giants PetroChina and CNOOC, and China Mobile , which operates the world's biggest network of mobile phone users.

Beijing will however retain control of critical lifeline industries, including enterprises related to national security and key economic sectors - upstream energy, transportation and ports, Zhang said.


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