China is set to establish five assets appraisal groups meeting internationally standards over the next five years to meet the State assets regulator's demand to strengthen the supervision of the overseas assets of State-owned enterprises (SOEs).
China United Assets Appraisal Group (CUAA), the first such group, was founded on Tuesday in a bid to provide advisory and attestation services to leaders in crucial industries when they engage in mergers and acquisitions, company restructuring and venture investment at home and abroad.
"China's assets appraisal groups should improve their international competitiveness to match the status of central SOEs in the international market. SOEs are accelerating their expansion abroad and are eager to get consulting services on overseas assets evaluation and assets safety in a fluctuating economic environment," said Meng Jianmin, vice-chairman of the State-owned Assets Supervision and Administration Commission (SASAC).
CUAA, created from the restructuring of the China United Assets Appraisal Co, consists of 21 subsidiaries, four branch companies and one research institute.
Its parent, with more than 90 percent of its clients coming from central SOEs, had appraised assets exceeding 49 trillion yuan ($7.46 trillion) accumulatively and generated revenue of more than 300 million yuan annually. These have been transferred to CUAA.
A total of five global assets appraisal groups with target revenue of more than 200 million yuan will be established within five years to meet the demand from China's SOEs for domestic and overseas assets evaluation, CUAA said.
In addition, China will set up 130 assets appraisal companies with annual revenue exceeding 5 million yuan.
"More assets appraisal groups will be established abroad to evaluate SOEs' overseas assets," He Bangqing, president of the China Appraisal Society, told China Daily.
"The communicating power of both China's central SOEs and assets appraisal groups could be improved internationally if we have our own assets appraisal branches abroad," said Guo Jianxin, deputy secretary-general of SASAC.
Guo said central SOEs will step up the integration of assets and expansion of business abroad over the next few years, both of which provide vast business opportunities for the assets appraisal industry.
China Nonferrous Metal Mining Corp plans to invest $1 billion in Africa over the next three years to deepen its presence in the region.
"China's overseas direct investment (ODI) is on a long-term upward trend despite a recent slowdown, partially due to political unrest in some African countries," said Yao Jian, a spokesman for the Ministry of Commerce.
In the first two months of this year, China's ODI grew by 13.1 percent from a year earlier to $5.27 billion, the ministry announced last week.
SASAC has urged SOEs to tighten their supervision of overseas assets and has asked assets appraisal groups to take greater efforts in evaluating SOEs' overseas assets, to avoid financial losses brought by the political chaos in some Middle Eastern and North African countries.