China unveiled new state-firms reformation plan prior to Xi Jinping visit to the United States. The plan will see all State-Owned Enterprises (SOEs) undergo restructuring process to convince more investors that Beijing is committed to improve the country's economic growth. The plan is expected to produce the result as early as 2020.

Reuters reported that the plan was announced by the Communist Party's Central Committee and Cabinet on Monday. According to the new plan, more private investment will be allowed into the SOEs to help bring transparency in running the enterprise. Firms will be selling more shares to public soon as it begins to become partially privatise.

However, the authority is not setting up a specific deadline for the move and it will not force any firm to do it. This is to allow firms to slowly restructure before any stock listing is done. The decision on who is allowed to invest will be up to the firms themselves.

The plan will also see some of the state firms being clean up and integrate into fewer entities as reported by the state media earlier this year. According to the report, there could be up to only 40 central government conglomerates after the merger from current 111.

All the companies are currently under the management of Assets Supervision and Administration Commission (SASAC). There are 25,000 companies under this commission with 7.5 million workers. The companies also make up 60 percent of SOEs revenue.

The step will also see the government giving more options to investors that are interested in the particular firm. According to Business Standard, the investors can choose to directly own a stake in firms, buy convertible bonds, or swap shares. To avoid any corruption, the government will take necessary precaution step during the process.

In a report by the Wall Street Journal, it noted how some local governments have started selling their shares to investors starting from last year. Among them is the purchase of Shanghai Jin Jiang International Hotels Group to Hony Capital. The transaction which worth $488 million saw Hony Capital owns 12.4 percent stake in the group.

According to officials, all the SOEs will be divided into two sector which is well-related and also commercial. From this two sector, the government will also identify which sector will be the best for non-state investment. However, Reuter cited that the move could become slow as it is hard for the central government to persuade investor during this time as the country had just faced its worst stock crash.