China is making efforts to cut capacity of its state-owned enterprises through reforms including structural adjustments.
Han Xiaoping with China5e.com, a website focusing on China's energy industry, says mergers between state owned enterprises in certain sectors is extremely urgent.
"The enterprise integration process will start with reducing the redundancies across management. After that, financial costs will be decreased while the operating efficiency gets to be improved. So now what we really need is to have most of these steel businesses, as well as other state-owned enterprises, integrated like this."
China plans to cut steel and coal capacity by about 10 percent -- as much as 150 million tonnes of steel and half a billion tonnes of coal --in the next few years with funds set aside to help displaced workers.
Early last month, Wuhan Iron and Steel and Shanghai-based Baosteel announced a plan for "strategic restructuring," creating the largest steel producer in China with annual output reaching at least 60 million tonnes a year.
The adjustments are seen in other industries too.
China International Travel Service Group has also recently finished the transformation of being a wholly owned subsidiary of China National Travel Service (HK) Group.
Zhang Chunxiao with the State-owned Assets Supervision and Administration Commission of the State Council, says more changes should be done.
"We should allocate state resources in the most efficient way. Further shrinking of the number of state owned enterprises should be made. The central government should focus on areas largely related to people's livelihood, related to state security, to the essential infrastructure as well as to critical natural resources."
Chinese authorities unveiled a new chapter of SOE reform early this year, putting the focus of reform on mega-mergers of state groups in order to boost competitiveness through economies of scale.
