China is preparing a fresh round of megamergers between state-owned behemoths in the energy, heavy machinery and steel industries as hopes fade for a more fundamental overhaul of the state sector.

Since a landmark economic reform blueprint to “raise corporate efficiency” at state-owned enterprises was approved by the Communist party in late 2013, government-orchestrated mergers have emerged as the primary focus of SOE reform. But progress has been slow in implementing other changes that could boost efficiency, including privatisation and increased competition.

State-owned enterprises account for more than a third of total investment and receive almost 30 per cent of bank loans but generate less than a tenth of total gross domestic product, according to Gavekal-Dragonomics, a Beijing-based research provider.

In Asia Pacific equities, futures tip Sydney’s S&P/ASX 200 to gain 0.2 per cent when trading begins, while Tokyo’s Topix is expected to open 0.6 per cent higher and Hong Kong’s Hang Seng is set to rise 0.1 per cent.

Corporate earnings reports out today include Create SD and Cosmos Pharmaceutical.

The economic calendar for Monday is simple enough (all times Hong Kong):

  • 07.50: Japan machine orders, balance of payments current account balance
  • 09.30: China consumer price index, producer price index
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