Chinese state leaders have started a new round of reforms for the state-owned enterprises or SOEs. The merging of state-owned assets in Shanghai and Guangdong has been initiated.

The first crucial step in restructuring SOEs was initiated within China’s center of economic progress, Shanghai. The initial mergers were reported by the Shanghai Securities News today on December 19, 2013.

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The state-owned corporations, Shanghai East Best International and Shanghai Lansheng Corporation, have merged their assets when the former acquired the latter. The two companies were previously under the direct authority of the government agency Shanghai State-Owned Assets Supervision and Administration Commission.

The merger of the two state-owned enterprises has been long anticipated by investors,pundits and by the general public. The latest action has revealed a new reform direction. However, the efficiency of operation and future success of the recently merged companies will remain to be seen.
Based on some reliable financial reports, Lansheng Corporation had a total revenue of 1.33 billion yuan or 218 million US dollars in last year. Meanwhile, East Best Group earned a higher total income of 68.4 billion yuan within the same year.

On another related news, the capital of Guangdong Province, Guangzhou, has initiated a reform in terms of supervising state-owned properties. The administrative reforms are aimed at making the asset management more effective and efficient, minimizing bureaucratic red tapes.

The newly established system of administration of SOEs in Guangzhou involves integrated supervision. This is more efficient compared to the previous systems that included confusing and sometimes overlapping regulations and supervisions from various local commissions and the cabinet-level departments of finance, publicity and transportation.

The reforms are patterned on the Singapore’s Temasek style of managing investments. This was according to an official of the Guangzhou's SOE Supervision and Administration Commission.

It should be noted that Guangdong is a pioneer in economic reforms in China. Way back in 2011, it publicly announced through the media that more than 60 per cent of its total SOE assets will be put into securities by the year 2015. However, only 20 percent of its assets has been securitized so far.