BEIJING, Feb 16: Foreign investors will be able to buy $1.34 billion worth of assets belonging to ailing Chinese state enterprises, state media reported on Saturday.

The assets are among a combined $167 billion of non-performing assets from bad loans made by China’s four large state-owned commercial banks.

The move by the China Great Wall Asset Management Corporation to open nearly $1.34 billion in non-performing assets to overseas investors followed a similar operation by the Huarong Asset Management Corp. late last year., Xinhua news agency said. The companies are among four firms set up to manage and dispose of the bad assets by selling them to overseas and domestic investors.

Huarong, China’s largest bad asset cleanup company, in November auctioned off $1.9 billion in non-performing loans to foreign and domestic investors in China’s first-ever auction of debt belonging to the country’s lumbering state-owned enterprises (SOEs). Great Wall said the huge amount of assets it was opening up for investment involved 167 projects covering 20 sectors, including real estate, pharmaceutical manufacturing, building materials, textile, mining, paper-making and power, Xinhua said.

The projects also includes 63 real estate projects, Xinhua said.

Details on the rules of investment were not given.

During the Huarong auction, there were investor concerns over a lack of clear government guidelines and regulations on legal issues.

China’s four asset management corporations — which also include China Orient and China Cinda — took over a combined $167 billion in bad loans from state commercial banks from 1999 as part of efforts by the central government to reform the hemorrhaging SOEs.

Western economists and bankers have long considered Chinese commercial banks to be essentially insolvent due to the high volume of NPLs.—AFP