The Chinese government has selected China Eastern Airlines to be part of a pilot scheme to reform state-owned enterprises to mixed Public/Private ownership models.
The scheme, which is being rolled out in a slow and controlled manner, is intended to reinvigorate China's bloated public sector by creating globally competitive multinational corporations capable of turning a profit by 2020.
As part of the first pilot reform scheme, the National Development and Reform Commission (NDRC) and the State-owned Assets Supervision and Administration Commission (SASAC) have included a broad spectrum of SOEs. Aside from China Eastern, they include China Southern Power Grid, Harbin Electric Corporation, the China Nuclear Engineering & Construction Corporation, and China Shipbuilding Industry Corporation. More precise details will be released shortly the official Xinhua news agency said last week.
The reform process has been in motion for a few years, with China Eastern selling a 3.55% stake to Delta Air Lines back in 2015 for USD450 million. China Southern is also in the process of securing regulatory approval for the sale of a 2.76% stake to American Airlines.
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