July 27, 2005 – China is set to order the merger of two major state electronics groups to create a multibillion-dollar conglomerate as part of its bid to improve corporate competitiveness, state press reported Tuesday, according to the Agence France-Presse.

The merger of China Electronics Corp (CEC) and China Great Wall Computer Group would make for a company worth more than 50 billion yuan ($US6.17 billion), the China Daily reported.

CEC had assets of 39.6 billion yuan in 2003, including Amoi Electronics and silicon chip manufacturer Shanghai Huahong Corp, while Great Wall owns 12.2 billion yuan in assets, including Hong Kong-listed Great Wall Technology Co.

The plan has already been submitted to the State Council’s Asset Supervision and Administration Commission, which is meant to guide the growth of China’s state enterpries, the newspaper said.

“We are currently assessing the assets of both CEC and the Great Wall Group,” said China Electronics VP Liu Xuehong.

“The shareholding structure of the new company that will be created has yet to be defined,” Liu told the newspaper.

Beijing is also studying the possibility of including the Panda Electronics Group in the tie-up as well another electronics conglomorate, China Putian Corp.

For some time, CEC has had plans to spin off its best assets, notably its mobile phone business, to assist its push to list overseas, but a merger could mean the overhaul of such plans.