SHANGHAI (Reuters) - Shanghai’s locally-owned state firms will invest an “additional” 800 billion yuan ($120.56 billion) annually over the next five years on top of their “regular” investments, mainly for key strategic industries, the city government said on Thursday.
It did not give details of how much regular investment these state-owned enterprises (SOEs) were planning, or what industries the additional funds would be for.
China’s ruling Communist Party has doubled down on its plans to reform the state sector through a mix of market forces and targeted support in a bid to cut inefficiencies and dominate certain swathes of the economy.
The latest thrust involves shaking up ownership structures and injecting private capital into the debt-ridden sector.
SOEs are also increasingly acquiring stakes in private companies, including firms in what the government regards as strategic sectors.
Investment in private companies in sectors such as finance, renewable energy and artificial intelligence is also a means for SOEs to chase higher returns and move away from waning industries such as low-end manufacturing.
In Shanghai, a large chunk of the city's $400 billion economy remains in the hands of the state, with firms such as SAIC Motor 600104.SS, a partner of Volkswagen VOWG_p.DE and General Motors Co GM.N, and Bright Food Group Co Ltd [SHMNGA.UL], one of China's biggest food processors.
Earlier this year, Shanghai made public new reform measures for its state-owned companies, including a pilot scheme of employee shareholding.
Local SOEs in Shanghai earned 3.1 trillion yuan last year, with net profit reaching 305.8 billion yuan, state media have reported.
Reporting by David Lin and John Ruwitch; Writing by Cheng Fang and Ryan Woo; Editing by Richard Borsuk and Sam Holmes
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