By Mao Lijun (China Daily)
Updated: 2007-10-24 10:46

Central China's Henan Province plans to set up a large State-owned investment vehicle to help boost the underdeveloped province.

The investment company, with a registered capital of 12 billion yuan, will provide investment and financing to power local industry.

The provincial government will merge three State-owned companies - Henan Construction Investment (Group), Henan Science and Technology Development Corp and Henan Economy and Technology Development Co - to form the new investment group.

The new company, Henan Investment (Group) Co Ltd, has already received provincial government approval, sources said. But its launch date is not yet available.

The new company's assets could total 29.3 billion yuan if the mergers are completed.

Henan Province, a major agricultural manufacturing base in China, is trying to build a "hi-tech and high value-added economy".

The move comes as the provincial government tries to merge large State-owned companies in industries like coal, chemicals and food.

The company is expected to provide funding for firms in the province's key industries including electronics, bioengineering, special machinery equipment, auto and auto parts and chemicals.

Henan Construction Investment (Group), an unlisted company, is the majority shareholder of three domestic listed companies - Henan Yuneng Holdings Co Ltd, Henan Ancai Hi-tech Co Ltd and Henna Tongli Cement Co Ltd.

Established in 1992 by the provincial government, the company has invested in 65 projects including a city bank. Its assets total 3.4 billion yuan.

Henan Science and Technology Development Corp had total assets of 77.16 million yuan at the end of last year and posted a net profit of 1.21 million yuan.

Henan is aggressively promoting investment in coal, environmental protection, energy saving, refinery machinery and hi-tech industries in a bid to revive the local economy.