New scheme for asset management companies

The State Council, China's cabinet, approved a scheme to assist the country's big four state-owned asset management companies (AMCs) as they try to recover their massive non-performing assets. The program sets specific targets on the amount of cash the AMCs should recover from distressed assets transferred to them, as well as total expenditures allowed in their work. The system will reward AMCs whose recovered cash exceeds the government-designated targets and penalize those AMCs who fall short of the targets. The big four state-owned AMCs in China are China Huarong, China Cinda, China Orient and China Great Wall. The AMCs were established in 1999 to recover US$168 billion in non-performing loans, of which they have reportedly recovered half, amid criticism of low efficiency and loss of state-owned assets.