The number of China’s central state-owned enterprises will further contract following approval of a merger between China Poly Group, Sinolight Corporation and China National Arts and Craft Group.
China’s State-owned Assets Supervision and Administration Commission (SASAC) has announced that the State Council has given its approval to China Poly Group’s acquisition of Sinolight and China National Arts and Craft, with the latter two set to become wholly invested subsidiaries of the former.
According to SASAC’s official website Sinolight and China National Arts and Craft will no longer be enterprises that it directly administers following the China Poly Group acquisition, shrinking the number of central SOE’s to 99 from 101.
The announcement comes amidst efforts by the Chinese central government to reform the country’s bloated, heavily-indebted state-owned enterprise sector, via an aggressive deleveraging campaign as well as the restructuring and consolidation of large-scale concerns.
China Poly Group, which was previously the arms selling branch of the People’s Liberation Army, is one of eight state-owned investment companies that are taking part in ongoing trial reforms.
Earlier this year in March, Shenzhen-listed Sinolight-subsidiary China Haisum Engineering announced that it would transfer Sinolight’s assets to Poly at “no cost,” with the execution of a framework agreement between the two central SOE’s on 20 March.
According to Peng Huagang (彭华岗), “a key work task for trial enterprises is advancing the restructuring and consolidate of relevant industries and businesses…to raise the allocation efficiency of state-owned capital.”
Shanghai Securities News reports that the current merger will be a “market-based consolidation,” and that China Poly Group’s international sales network will provide assistance to Sinolight’s trading operations.
Sinolight itself was established after the State Council gave its approval at the end of 2008 to the merger of a trio of central SOE’s – the original Sinolight Group, China Haisum International Engineering Investment Corporation and China Light Industry Foreign Economy Technology Cooperation Company.
The Beijing-based company’s primary operations include the development, manufacture and sale of light industry equipment and raw materials both in China and abroad, as well as general engineering contracting and technical services.
China National Arts and Craft was formed in February 2007 via the merger of two central SOE’s – China Arts and Crafts Import & Export General Company and the original China National Arts and Craft, with its business scope encompassing textiles, jewellery, special crafts and daily use goods.
Founded in 1999, China Poly Group is a conglomerate encompassing an eclectic miscellany of sectors, including defence manufacturing, international trade, real estate and fine arts.
According to a New York Times article the company is the world’s third largest art auction house after Sotheby’s and Christie’s.