BEIJING (Reuters) - China has launched a 350 billion yuan ($52.5 billion) restructuring fund as the government pushes 'supply-side' reforms that have included mergers of inefficient state enterprises and laying off workers in struggling sectors such as coal and steel.
The China State-owned Enterprises Restructuring Fund will be managed by the State-owned Assets Supervision and Administration Commission (SASAC), the Economic Information Daily, a newspaper run by the official Xinhua news agency, reported on Monday.
SASAC did not immediately comment.
Ten state-owned enterprises have provided initial registered capital of 131 billion yuan, the newspaper said. It did not spell out how the rest of the funds would be raised or how the proceeds would be used.
China has made reform of state enterprises, many suffering from surplus production capacity, a nationwide priority as economic growth slows. For some sectors reform means mega-mergers - such as the marriage last year of top train makers China CNR Corp and China CSR Corp - to create national champions with the heft to compete on the world stage.
China is not the first country to create a fund to support state firms going through hard times. The South Korean government has approved a $9.5 billion fund to help recapitalise state-run banks exposed to the country's troubled shipping sector.
The Chinese fund is targeting sectors facing overcapacity, said Zhou Hao, senior emerging markets economist at Commerzbank.
"This fund aims to facilitate the destocking and deleveraging process," Zhou said.
The 10 firms investing in the Chinese restructuring fund include China Mobile Ltd, China Railway Rolling Stock Corp, China Petroleum & Chemical Corp and China Chengtong Holding Group Ltd, a restructuring platform supervised by SASAC that will lead the fund.
China's debt-ridden state sector, including its sprawling oil-and-gas industry, has struggled under a system that requires state firms to maximise economic gains while fulfilling government policy objectives.
As part of a five-year plan, the government has vowed to create innovative and globally competitive enterprises through mergers, asset swaps and management reforms.
China will reduce the number of state-owned enterprises this year to no more than 100 from 106, state media reported in July, citing SASAC Deputy Secretary-General Peng Huagang, who added that 10 central SOEs were in talks to create five groups.
China's central state-owned enterprises will complete their restructuring by the end of next year by introducing private capital and strategic investment into their projects, the Economic Information Daily reported earlier this month, citing unnamed insiders. ($1=6.67 yuan)
(Reporting by Ryan Woo and Beijing Monitoring Desk; Editing by Richard Borsuk and Neil Fullick)