Shanghai's Changning District yesterday established a company to reform state-owned enterprises and serve as a financing platform for companies in the area.

The Shanghai Changning State-owned Assets Management and Investment Co will set up financing channels for projects within the district and introduce external investors in an effort to revitalize SOEs.

It has also signed a letter of intent with Shanghai International Assets Management Co to support the building of major infrastructure in the east Hongqiao area. Both parties will initially invest 300 million yuan (US$43.9 million) and also invite other institutional investors.

"We'll gradually lower the percentage of state-owned assets in large enterprises by introducing more strategic partners in the future," said Huang Jinglin, party secretary of the state-owned asset supervising committee of Changning District, without offering a timetable.

In a recent guideline, the Shanghai Commerce Commission announced that the Greater Hongqiao Area will play a vital role in upgrading the retail industry and serve as a catalyst for the city's economy. The area, which covers Changning, Minhang, Qingpu and Jiading districts, will serve as a major platform for Shanghai to upgrade its service industry and become a major transport hub, government officials have said.

"We will cooperate with local as well as overseas financial institutions to provide more financing channels for companies within the region through equity financing," said Tan Siyi, general manager of the new company. She didn't reveal which companies or institutions will be involved in the financing project.

The state-owned company, whose registered capital is 500 million yuan in phase I, will focus on the city's pillar industries, including finance, property and new energy. It will also serve as a financing platform to introduce external investors for companies registered in the district.

It has received a 20-billion-yuan credit line from three domestic banks.