China will establish a new logistics conglomerate this year to better facilitate its foreign trade and supply-side structural reform. The new group will be formed by a number of subsidiaries from logistics businesses owned by Beijing-based China Chengtong Holdings Group, a state-owned asset management company, and China Railway Materials Group Corp (CRM), which is also supervised by China Chengtong on behalf of the State-owned Assets Supervision and Administration Commission (SASAC). “We will promote the orderly reorganization and integration of our logistics sector, synergizing China’s high-quality resources to build a comprehensive logistics group with complete business, wide coverage and strong competitiveness,” said Shan Zhongli, Board Director of China Chengtong. SASAC owns 66.67% of the new group, with the rest owned by China Chengtong and China Reform Holdings Corp. Managing CNY660 billion of state funds, China Chengtong also operates over CNY70 billion of equity of listed companies, and remains a major shareholder of several central SOEs such as National Petroleum and Natural Gas Pipe Network Group Co.
Addressing a news conference in Beijing, Shan said the group’s subsidiaries, including Beijing-based CMST Development Co, China Logistics Co and Shanghai-based CTS International Logistics Corp, have built logistics networks covering China, Europe, North America and Southeast Asia, and operate storage facilities and railroads in many parts of the world. Together with CRM’s businesses in railway equipment and construction, logistics and oil businesses at home and abroad, the new group will be a formidable force to help develop China’s modern circulation system, he added. Based in Beijing, CRM has more than 100 branches in China, the United States, Australia, Laos and other countries and regions. It is a major supplier of railway oil and provides railroad maintenance and logistics services domestically.
China Chengtong took part in the reorganization and integration of key industries such as oil and gas pipeline networks, steel, electrical equipment and modern logistics, as well as in the diversification of equity of SOEs, such as Liaoning-based steelmakers Ansteel Group and Ben Gang Group Corp. China Chengtong also became a shareholder of newly formed China Electrical Equipment Group Co.
Liu Xingguo, Researcher at the China Enterprise Confederation, said that the strategic reorganization of central SOEs will accelerate the development of world-class enterprises with global competitiveness and help maintain the stability of industrial and supply chains. China’s 96 SOEs administered by the central government saw their profits soar 72.9% year-on-year to CNY2.08 trillion in the first eight months, while their revenue surged 23.3% on a yearly basis to CNY26.62 trillion, said the Ministry of Finance, as reported by the China Daily.
