China to Form New China Power Equipment Group
What’s new: A new central government-owned enterprise consolidating several power equipment companies will be officially established in a couple of days, a person participating in the reorganization told Caixin.
China Xidian Group (601179.SH), Xuji Group (000400.SZ), Pinggao Group (600312.SH) and Shaanxi Baoguang Vacuum Electronic Apparatus Co. Ltd. (600379.SH) said Tuesday that the State Council approved their combination to establish a new power equipment company.
A management team of China Power Equipment Group made up of executives from the publicly traded companies as well as two outside directors named by the State-owned Assets Supervision and Administration Commission will also been announced soon, the person said.
The new company will be registered in Xiong’an, the new city constructed in North China’s Hebei province to serve as a new home for Beijing’s colleges, government agencies and businesses, and headquartered in Shanghai, Caixin learned.
The background: The reorganization is part of China’s six-year-old power industry overhaul to reduce electricity price distortions, including separating generation from transmission.
China is the world’s largest electricity producer, generating more power than the next three countries combined—the U.S., India and Russia. The country’s electricity market has long been plagued by price distortions and lack of competition. In 2015, the State Council renewed efforts to overhaul the industry, hitting on the idea of bringing privately operated distribution networks into competition with existing state-owned networks to improve efficiency and reduce prices.
Contact reporter Denise Jia (email@example.com) and editor Bob Simison (firstname.lastname@example.org)
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