China Poly merger a milestone in SOE reform

Real estate developer China Poly Group Corp's merger with Sinolight Corp and China National Arts and Crafts Group marks a future trend in China's ongoing efforts to improve its State sector, an expert said.

A giant State-owned enterprise with diversified and international business merging with firms with relatively smaller assets and overlapping business will be the future direction of SOE restructuring and reform, said Li Jin, chief researcher at the China Enterprise Research Institute.

Compared with previous mergers in the upstream and downstream sectors, the merger plan which will make Sinolight and China National Arts and Crafts Group subsidiaries of China Poly Group, is more like a "big fish eating smaller fish", and could further reduce the resistance of State-owned companies to reform and raise competitiveness, said Li.