Zhongrui Syndicate, a syndicate initiated by Wenzhou's nine private enterprises, will be officially set up in the middle of June 2004, source with the preparation team said recently.
Wang Zhentao, president of Wenzhou Aokang Group and head of Wenzhou Commerce Chamber, said that the purpose of the move is to explore a new development method for China's booming private economy.
Wang was reluctant to tell the registered capital, share structure and their possible investment options in the future, but he revealed that the syndicate will invest in big project that cannot be completed by any single enterprise.
The preparation team promises to adopt modern management methods, with separation of share holding and operation rights.
The nine proposing private enterprises include Sunlead Group, Aokang Group, Guoguang Property Co. Ltd, Fapai Garments Co, Ltd, Taili Industrial Co. Ltd., Yuanyang Glasses, Xingji Group, Tengen Group Corp. Each of them is leading enterprise in their sectors (see Table-1).
Table-1: nine proposing enterprises
|
|
Field |
|
Sunlead Group |
Machinery; foreign trade; sewage disposal; real estate |
|
Aokang Group |
Shoes |
|
Guoguang Property Co. Ltd |
Real estate |
|
Fapai Group |
Garment; shoes |
|
Taili Industrial Co. Ltd |
Switch; socket |
|
Yuanyang Glasses |
Glasses |
|
Xingji Group |
Siren |
|
Tengen Group Corp. |
Low voltage equipment |
|
Tenyale Locks Co. Ltd |
Lock |
The founding of Zhongrui Syndicate Holding Co. Ltd. was approved by State Administration for Industry and Commerce in February 2004. Wenzhou city government has expressed its support for the syndicate.
Private economy in Wenzhou, east China's Zhejiang Province, has been booming since China adopted the policies of opening-up and reform. However, compared with large enterprises either at home or overseas, there is still a big gap for Wenzhou's enterprises to catch up.
"Enterprises in Wenzhou must join their forces to form a union when they develop to certain extent," said Ye Zijian when interviewed with 21st Century Economic Report in March.
Aiming at high-profit projects?
Some analysts pointed out that the combination of these enterprises aims to win contracts of projects in public facilities. Their reasons are as follows: Wenzhou city government has planned in the next five years to invest in 103 key projects, ranging from transportation and energy to other urban infrastructure constructions, with a total investment of 204 billion yuan (US$24.6 billion), while local officials encourage private enterprises to participate in key construction projects.
The preparatory team confirms that they have already consulted with the local government on four important infrastructure projects. Real estate industry, one of the overheating sectors in China, is also one of their future options.
"The high profit in real estate and urban infrastructure construction is the main reason for their ally," commented Jiang Hongqing, a local researcher.
(China.org.cn by Tang Fuchun, June 1, 2004)
