Business
17:31, 29-Jun-2017
China's Sinomach merges with state textile giant
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China's State Council has approved a merger between China National Machinery Industry Corporation (Sinomach) and textile giant China Hi-Tech Group Corporation, an official statement announced Thursday.
The textile conglomerate has become a wholly-owned subsidiary of equipment manufacturing group Sinomach, and will no longer be directly supervised by the State-owned Assets Supervision and Administration Commission (SASAC), according to the statement released on SASAC's website.
The news brought down the number of central state-owned enterprises (SOEs) to 101. The SASAC has planned to reduce the number of central SOEs to under 100 as part of ongoing reforms to improve the efficiency of the companies.
China is determined to improve the efficiency of SOEs through reform and restructuring. /VCG Photo
China is determined to improve the efficiency of SOEs through reform and restructuring. /VCG Photo
The merger bodes well with the country's aim to raise the competitiveness of SOEs, bringing technology and research capabilities to China Hi-Tech Group and similar companies that are part of an industry beset by shrinking revenues, said Li Jin, chief researcher with the China Enterprise Research Institute.
In afternoon trading, the shares of subsidiaries under the two companies rose as investors were optimistic about the synergy resulting from the merger.
Jingwei Textile Machinery Company, a subsidiary of China Hi-Tech Group, for example, jumped more than five percent following the news of the merger.
(Source: Xinhua)