Top State-Firm Supervisor Launches New Asset Manager

The overseer of China’s largest state-owned enterprises (SOEs) has added a new asset manager to its stable of about 100 firms, which could become an important player in its ongoing campaign to streamline and rationalize the group.

Formation of the new company, China Rongtong Asset Management Group, was announced by the State-owned Assets Supervision and Administration Commission (SASAC) in a Tuesday post on its website.

The new company’s public WeChat account describes it as a manager of centrally-owned assets in a wide range of areas. Those include real estate, agriculture, tourism and hotels, as well as services for industries from recycling, technology and health care to security and finance. The company is one of three new SOEs set up by SASAC since last year.

SOEs are still an important piece of China’s economy, a legacy from the country’s socialist past when everything was state-owned. While their role has faded somewhat in recent years with the rise of the country’s private sector, they still play a dominant part — often with near-monopoly status — in traditional sectors such as energy, heavy industry and telecoms.

Such companies exist at both the local and national levels, with most of the big national SOEs falling under SASAC’s umbrella. SASAC has moved aggressively in recent years to overhaul those companies by combining ones in similar sectors, introducing outside capital and forcing them to streamline, making them more efficient and commercial.

Rongtong Asset Management could become one of the companies helping to drive such reforms, based on the profile of one of its top two new executives. The company’s first party chief is Wen Gang, 53, who comes from a military equipment background. But its general manger Ma Zhengwu, 57, comes from a background at the top of another SASAC-owned asset management company that has played an important role in overhauling big centrally-owned SOEs.

Ma worked for 18 years at China Chengtong Group, most recently as its chairman. In 2005, Chengtong became part of a pilot program as a manager for centrally owned assets under SASAC, and later became a platform for reorganizing some of those assets. In 2016, Chengtong took on the added role as operator of centrally owned state assets under another pilot program.

Afterwards, it helped to reform other companies under SASAC, including China Petroleum & Chemical Corp. and China Railway Materials Group Corp. During his tenure at Chengtong, Ma also held more short-term high-ranking titles at many of the SOEs that Chengtong helped to reform. He left Chengtong about a year ago to “take on an important position” at another unnamed company, Chengtong announced at the time.

Contact reporter Yang Ge (geyang@caixin.com; twitter: @youngchinabiz)