In its August 15 statement, Baosteel announced that its controlling shareholder, Baosteel group is planning to transfer 800 million shares to China National Petroleum Corp., mirroring a similar move by the energy company earlier this year where China National Petroleum Corp. announced that its plan to transfer 624 million shares to Baosteel group.

This is yet another case of cross-shareholdings by the central enterprises, reflecting a new direction in the capital operation as a result of the SOEs reforms.

The research team at ANBOUND Consulting suggests that in the future, there will be more cross-shareholdings through capital operations, and this will soon become a new path of SOEs reform.

This is considered beneficial to the central enterprises in terms of improving the industrial structure, the collaboration and integration of the industrial chain as well as establishing 'state capital investment and management companies' as envisioned by the SOEs reform.

In the future, the SOEs reform will adopt some of the ideas and practices in relation to ‘economic consortium’ from the developed countries.