The Ministry of Industry and Information Technology has issued ten major industry mergers and restructuring policies during the year

After the Ministry of Industry and Information Technology just issued a deadline to eliminate backward production capacity, the merger and reorganization came again from the Ministry of Industry and Information Technology.

Recently, some media said that the Ministry of Industry and Information Technology drafted the policy of “supporting industry mergers and reorganizations” has been reported to the State Council and will mainly support large-scale enterprises for mergers and reorganizations in terms of finance, taxation, and resource allocation.

Recently, relevant officials of the General Office of the Ministry of Industry and Information Technology confirmed to the “China Business” reporter that the policy had indeed been reported to the State Council and could be introduced within the year. In addition to the nine major industries of iron and steel, automobiles, textiles, equipment manufacturing, shipbuilding, electronic information, petrochemicals, light industry and non-ferrous metals, the restructuring policy of the industry has also added new building materials industry. The industry is also known as the top ten industry mergers and restructuring policy.

The policy is also a supplement to the previously announced plans for the ten major industry revitalization plans. The ten major industrial rejuvenation plans will include mergers and acquisitions within the industry.

However, experts in the merger and reorganization of research companies stated that it is difficult to effectively support the industry's merger and reorganization policy to solve some of the problems that currently arise in mergers and acquisitions.

It is difficult to implement the merger and reorganization policy Although the merger and reorganization policy has been submitted to the State Council, can this policy be solved after the introduction of the current issues related to corporate restructuring?

In fact, in August 2009, the news was frequently seen in the news that the "Ministry of Industry and Information Technology of the People's Republic of China proposed to implement the merger and reorganization plan for the ten key industries." In March of this year, the Ministry of Industry and Information Technology further disclosed: “The guidance for mergers and reorganizations across industries will be introduced throughout the country, which will exceed the industry's restrictions and remove institutional barriers to mergers and acquisitions from a higher level.” In light of various signs, it will be issued. The "merger and reorganization" policy is intended to further clarify some of the persistent problems in cross-regional restructuring.

"The problem of cross-regional restructuring of enterprises is far from simple," said Zhang Wenkui, deputy director of the Institute of Enterprise Research at the Development Research Center of the State Council. There are many factors that affect mergers and acquisitions between the right and the left. The key is control, taxation, and development dominance.

“All of these have a game of interests. Control rights are related to personnel appointments, etc.; tax issues are not just about how to allocate, but also through which channels distribution is made; while the development of dominance is a bigger issue, and it is related to the overall economy of a regional economy. Development.Unless these relations are clarified, the resistance faced by cross-regional mergers and reorganizations cannot be eliminated," Zhang Wenkui told the China Business News reporter.

For example, Baosteel and Baotou Iron and Steel Corp., which has not been conclusive for a long period of negotiations, may develop Baosteel as an internal steel plate for the company; however, the Baotou government is likely to use the steel as a local driving force. Leading companies to consider, hoping to use it to develop rare earth, to extend downstream, or overseas mergers and acquisitions. "The leading role of corporate development is very important for local governments." Zhang Wenkui said.

Zhang Jinxin, deputy director of the China Enterprise Merger and Reorganization Research Center, also deeply understands this. “Across-region integration of enterprises, local governments will put forward many requirements, such as paying taxes locally, increasing other additional investments, etc. Some companies may even The government has signed an agreement of intent, but because those extra conditions have not been met, the result will not be reorganized." Therefore, the difficulty of restructuring across regions can be imagined.

Today, the restructuring of the central government Anshan Iron and Steel and Liaoning Bengang is still at the stage of “jointness and disintegration”.

In addition to this, more trivial issues are endless, such as employee problems. In 2009, the tragedy of Jianlong Iron and Steel Group's reorganization of the Tonghua Iron and Steel Group (the case of Chen Guojun had taken place) was not just an isolated case in the case of the merger of state-owned enterprises by private enterprises. Even if the mergers and acquisitions between state-owned enterprises, personnel will stay in the footsteps of integration.

Administrative reorganization is still the mainstream and another issue of concern is the status of private enterprises in mergers and reorganizations. In 2009, the merger and restructuring in full swing, the "national advancement and retreat" triggered a hot debate. Against this background, whether the introduction of this policy will allow private enterprises to "oppose customers" is even more worth looking forward to.

The positive signal seems to have been revealed. On June 30, the executive meeting of the State Council emphasized that in order to promote mergers and reorganizations of enterprises, we must persist in giving play to the main role of enterprises and fully respect the wishes of enterprises. At the same time, it is required to effectively open private capital to industries and fields that are not prohibited by laws and regulations, accelerate the reform of monopoly industries, and encourage private capital to enter the competitive business field of monopoly industries through mergers and acquisitions.

“These policies will promote the merger and reorganization of private enterprises as the main body,” said Ma Zhongpu, a well-known steel expert who once served as a full-time researcher at the Angang Institute of Economics.

Some companies are already trying. At the end of 2008, Tangshan Bohai Iron and Steel Group and Tangshan Great Wall Steel Group, which are composed of 12 and 27 private steel companies, were formally established. The production capacity reached 15 million tons and 13 million tons respectively, forming a strong competitive trend with state-owned enterprises.

“This is a good attempt for the troubled private steel companies. If the policy encourages this, it will be a more desirable direction for private mergers and reorganizations,” Ma Zhongpu said.

However, such a “jedi fight back” does not seem to be excessive, and more companies are still at risk of unpredictable mergers.

According to the reporter, Hebei Iron and Steel Plant, which has an annual output of several million tons, still belongs to “unlicensed operation”. The "black household" has already had a lesson in the end. In September 2009, after many struggles, Rizhao Steel, with an annual output of 10 million tons, could not be taken over by Shandong Iron and Steel Group. Although the former has made a lot of profits, the latter has suffered serious losses. Industry insiders said that it was precisely because the Ministry of Environmental Protection had suspended some of the core items of the Japanese steel and the reunification negotiations that had been stalemate had been made. This made it impossible for Du Shuanghua, chairman of Rigang Group, to do anything.

"In addition to Chongqing, Shanghai and Shenzhen, where local governments have strong capital awareness, administrative forces are still the dominant force in local restructuring." Zhang Jinxin said.

In such mergers and reorganizations, private enterprises obviously do not occupy policy advantages. An industry insider who declined to be named stated that “policies and regulations will be biased toward state-owned enterprises. For example, the state-owned enterprises are obviously more likely than private enterprises to obtain this 'grant card'.”

Today, the restructuring of the central government Anshan Iron and Steel and Liaoning Bengang is still at the stage of “jointness and disintegration”.

In addition to this, more trivial issues are endless, such as employee problems. In 2009, the tragedy of Jianlong Iron and Steel Group's reorganization of the Tonghua Iron and Steel Group (the case of Chen Guojun had taken place) was not just an isolated case in the case of the merger of state-owned enterprises by private enterprises. Even if the mergers and acquisitions between state-owned enterprises, personnel will stay in the footsteps of integration.

Administrative reorganization is still the mainstream and another issue of concern is the status of private enterprises in mergers and reorganizations. In 2009, the merger and restructuring in full swing, the "national advancement and retreat" triggered a hot debate. Against this background, whether the introduction of this policy will allow private enterprises to "oppose customers" is even more worth looking forward to.

The positive signal seems to have been revealed. On June 30, the executive meeting of the State Council emphasized that in order to promote mergers and reorganizations of enterprises, we must persist in giving play to the main role of enterprises and fully respect the wishes of enterprises. At the same time, it is required to effectively open private capital to industries and fields that are not prohibited by laws and regulations, accelerate the reform of monopoly industries, and encourage private capital to enter the competitive business field of monopoly industries through mergers and acquisitions.

“These policies will promote the merger and reorganization of private enterprises as the main body,” said Ma Zhongpu, a well-known steel expert who once served as a full-time researcher at the Angang Institute of Economics.

Some companies are already trying. At the end of 2008, Tangshan Bohai Iron and Steel Group and Tangshan Great Wall Steel Group, which are composed of 12 and 27 private steel companies, were formally established. The production capacity reached 15 million tons and 13 million tons respectively, forming a strong competitive trend with state-owned enterprises.

“This is a good attempt for the troubled private steel companies. If the policy encourages this, it will be a more desirable direction for private mergers and reorganizations,” Ma Zhongpu said.

However, such a “jedi fight back” does not seem to be excessive, and more companies are still at risk of unpredictable mergers.

According to the reporter, Hebei Iron and Steel Plant, which has an annual output of several million tons, still belongs to “unlicensed operation”. The "black household" has already had a lesson in the end. In September 2009, after many struggles, Rizhao Steel, with an annual output of 10 million tons, could not be taken over by Shandong Iron and Steel Group. Although the former has made a lot of profits, the latter has suffered serious losses. Industry insiders said that it was precisely because the Ministry of Environmental Protection had suspended some of the core items of the Japanese steel and the reunification negotiations that had been stalemate had been made. This made it impossible for Du Shuanghua, chairman of Rigang Group, to do anything.

"In addition to Chongqing, Shanghai and Shenzhen, where local governments have strong capital awareness, administrative forces are still the dominant force in local restructuring." Zhang Jinxin said.

In such mergers and reorganizations, private enterprises obviously do not occupy policy advantages. An industry insider who declined to be named stated that “policies and regulations will be biased toward state-owned enterprises. For example, the state-owned enterprises are obviously more likely than private enterprises to obtain this 'grant card'.”