China is reportedly considering cutting the number of centrally administered State-owned enterprises (SOEs) to between 50 and 60 within three years from the current 112, the Beijing-based China Times reported.

The report, however, did not disclose the reason for such plan but could partly be due to the lackluster performance of some SOEs in recent years.

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But the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) said combined profits at central SOEs increased by 4.2 percent in 2014 from a year earlier to US $228 billion.

SASAC added that profits last year had the highest growth rate in three years, compared to 3.8 percent in 2013 and 2.7 percent in 2012.

The reduction is part of China's sweeping overhaul of the State sector, the report said

Last month, the 18th Communist Party of China Central commission for Discipline Inspection (CCDI) published the concluding report of its fifth plenary session, which listed SOEs as the next main targets of anti-graft storm.

"SOEs have long been notorious for rampant corruption and the root of the problem lies in their distorted power structure, in which the head of the company decides everything without consulting others," said Li Yongzhong, senior researcher and deputy dean of the China Discipline Inspection and Supervision College.

"Worse, instead of being the winner of fair competition, the person in this position is nominated by higher bureaucrats, which leaves loopholes for them to trade the nomination for profit. It is necessary to change the mechanism in order to root out corruption," he added.

Li Jin, vice-director of the China Enterprise Reform and Development Society said it is incomplete market-oriented reform that has resulted in corruption and other issues concerning SOEs.

"They are defined as both State agencies and market competitors, which easily breeds illicit revenue for their top executives. Authorities need to learn the lesson that bureaucratic power and economic resources should never be in the same pair of hands," Li said.

Early in February, China's anti-corruption watchdog said it has stepped up inspections of state-run conglomerates.  CCDI had already dispatched teams to 14 SOEs, including Sinopec and the Export-Import Bank of China.

TagsChina SOEs, China's State Enterprises