(China Daily) The State-owned Asset Supervision and Administration Commission will this year encourage China's major State-owned enterprises (SOEs) to list as entire groups, rather than listing only a part of the enterprise, a senior commission official revealed yesterday.

Commission Vice-Minister Shao Ning told the China Economic Development Conference: "Making them public is a good way to improve the structure of SOEs.".

"But we prefer them to list the whole group, instead of splitting the company and listing its better assets," Shao told the conference, organized by the China International Institute of Multinational Corporations, which wound up yesterday in Beijing.

He added that SOEs that remain "burdened with bad assets must submit concrete measures with their listing applications on how to deal with these before achieving a complete listing."

An alternative option proposed by Shao is for those SOEs to sell their bad asset to asset management companies.

This will require China to establish asset management companies to take care of SOEs' bad assets, in the same way that it set up four asset management companies to handle the four State-owned commercial banks' bad assets.

"That is a better way," Shao said, but did not elaborate on when these firms will be established.

China's SOEs had previously launched initial public offerings by splitting entire groups and listing the part with better assets, while leaving the bad assets with the parent company.

But this greatly impacts on the quality of China's listed firms and depresses investor confidence, as the parent company remains the de facto decision-maker for the listed part, or in other words, the listed firm becomes a financing platform for its bad-asset-ridden parent.

"The parent companies should be placed under public supervision," Shao said.

That is only part of the commission's efforts to restructure SOEs.

It will also help SOEs to focus on their core businesses.

Last year, the commission launched pilots at three SOEs - Sinopec, PetroChina and Dongfeng Motor - and helped clear away a total of 800 unprofitable entities, including schools - a combined burden of 4 billion yuan (US$483 million).

Local governments took over these entities but received full subsidies from the central government.

"As the experiment has proven successful, we will now spread it to a further 40 SOEs this year," Shao said.

The commission will also accelerate the establishment of city and county-level commissions. Last year, it set up commissions in all provinces.

SOE reform is expected to intensify with the establishment of commissions at all levels of government.