China’s government has laid out plans to promote industrial mergers and acquisitions in a bid to accelerate economic restructuring and increase industrial competitiveness.
The sectors involved include automobiles, steel, cement, machinery, rare earths and aluminum, said a statement from the State Council, or Cabinet, on its website, www.gov.cn, on Sep.6.
Some industries that face replicated construction, low concentration, weak self-innovation and competitiveness needed consolidation through mergers and acquisitions, the statement said.
The government would scrap rules that restricted cross-regional mergers and acquisitions, the statement said. Local governments could sign agreements on dividing revenues and taxes of companies formed through cross-regional mergers and acquisitions, said the statement.
Further, the government would encourage private investment in authorised sectors and allow private capital to take greater stakeholdings in companies, the statement said.
The government would also step up reform of monopolistic industries and promote the entry of private capital through mergers and acquisitions, the statement said.
Local governments and commercial banks were encouraged to give financial support for such mergers and acquisitions, the statement said.
In addition, China will intensify efforts to draw factories inland from crowded coastal regions, a government directive said, but warned officials to leave such decisions to companies.
The State Council, or cabinet, stressed the importance of relocating industry inland to keep manufacturing competitive and encourage job growth closer to the homes of China s vast rural population, which has long provided cheap factory labour.
The official push builds on growing momentum for factories to move from Guangdong, Zhejiang and other eastern coastal provinces facing rising land and labour costs.
"The international and domestic division of labour is now undergoing profound adjustments, and the pace of industry relocating from our country s eastern coastal regions to central and western regions is accelerating," said the document released late on Monday night and reported in papers on Tuesday.
"Actively guide the labour force to transfer to employment in areas close to home, encourage an agglomeration of industry and population and accelerate urbanisation," it said.
For more than a decade, Beijing has campaigned to "develop the west" by encouraging investment in inland provinces, and the new directive said taxation, finance, investment and land policies would be used to extend that effort.
But it warned officials not to pressure investors into shifting factories.