Recently, in a bid to become a fully integrated company specializing in trust, stocks, insurances and other financial businesses as well as energy –efficient business, Hunan Valin Steel announced that it is planning to swap its existing steel assets through assets swap and fund raised through issuance of new shares and other fund raising activities will be injected into high quality financial assets including Fortune Securities and Hunan Trust as well as procuring energy-efficient generators.

The research team at ANBOUND Consulting is of the view that the local financial holding platform helps to ensure the coordinated development of industrial economies, making good use of the state-owned assets, promoting investment and reducing non-performing assets.

There are a growing number of provinces setting up their own financial holding companies and a new model has emerged, i.e. the local governments make use of the shell companies as a platform to list their financial assets.

The local governments, particularly the central and western regions that are relatively backward economically, should draw on this model.