Beijing considering more aid for ailing state-owned firms

Regulators in Beijing were considering an aid package for ten of its state-owned corporations, with the ailing Sinosteel Corporation set to be a major beneficiary.

Bloomberg cited unnamed sources “close to the matter” as saying the Chinese government is considering a number of options, including asset or equity transfers, takeovers and preferential policies.

It’s understood the plans are still in early stages and under discussion.

Beijing has a number of state asset management firms at its disposal, including China Chengtong Holdings Group and China Reform Holdings, which could take struggling state companies under their wings.

Another option, according to the Bloomberg sources, would see weaker enterprises receive assets or equity from their stronger counterparts.

China’s politburo has stepped in to bolster its government supported industries recently, with profits in the sector dropping by around 10% in the first five months of this year.

Firms have been particularly struggling with overcapacity as the country’s economy slows down.