The central government is pushing forward a plan to take control of state-owned firms from the sector's regulator and hand it over to a new company.

The plan was seen by analysts as moving the regulator towards a more supervisory role, although it is unclear which agency would directly control the company.

"The conditions for establishing a company to handle the operation of the state-owned assets are ripe," Li Rongrong , minister in charge of the State-owned Asset Supervision and Administration Commission (Sasac), said yesterday in Beijing.

He said a plan to revise the holding structure of central government-controlled enterprises was ready. Transferring the property rights of these enterprises would be Sasac's main task next year.

There are 138,000 state-owned enterprises (SOEs) on the mainland, with 169 directly under Sasac.

Yi Xianrong , director of the Chinese Academy of Social Sciences' Finance Research Centre, said the move was a "step in the right direction", but expressed concern over who would assume control.

"The reform allows Sasac to concentrate on its role as a state regulator, with the newly set-up company to handle the operation of the state-owned firms," Mr Yi said.

But he added the company should fall directly under the supervision of the National People's Congress, which should pass legislation on the role and responsibilities of the company and its relationship with Sasac.

"Otherwise, who knows who has the right and responsibility to operate, and who has the right and responsibility to supervise those huge state assets?" Mr Yi said.

At the end of last month, assets held by the 169 firms under Sasac were up 14.2 per cent year on year at 10.6 trillion yuan, Mr Li said.

Their sales for the first 11 months of the year were up 21.8 per cent year on year at 5.99 trillion yuan.

For the year, sales are expected to reach 6.6 trillion yuan, and profits to hit 600 billion yuan.

Mr Li said the number of state-owned enterprises was falling by 4,000 to 5,000 a year under a reform programme aimed at making state firms more competitive.

The decrease included mergers and the closing of unprofitable ventures.

"The number of state-owned firms is being reduced, but their influence in the national economy is strengthening," he said.

Mr Li said the government had accelerated the introduction of the share-holding system into SOEs this year.

He also said that the government was encouraging SOEs to list elsewhere before listing on the mainland. Many state giants have chosen Hong Kong for their initial public offerings.

"China's SOEs should be more competitive in the international market, and listing overseas will be helpful in improving company structure and management," he said.

Mr Li said the ongoing share reform is progressing smoothly, and while some companies are facing difficulties in carrying out reform, the central government will remain determined to push ahead.

Meanwhile, Mr Li said that state-owned Jilin Petrochemicals should be legally accountable while the management of its parent company, PetroChina, should take moral responsibility for the losses suffered from a chemical spill last month.