The State Council Information Office issued a document on Tuesday to guide the restructuring and merger of the country's centrally administered State-owned enterprises (SOEs), said a statement on its website.
More government capital should be channeled toward crucial industries to support their development, according to the statement.
SOEs should become more innovative by optimizing their research and development -programs and strengthening basic research for eventual application.
Companies in sectors including equipment manufacturing, construction and iron and coal should merge so as to pool their resources and cut production overcapacity.
Early in February, the State Council pledged to cut crude steel production by 100-150 million tons in the next five years .
Also, it plans to shut down 500 million tons of coal capacity and consolidate another 500 million tons over the next three to five years.
Through restructuring and mergers, centrally administered SOEs should achieve clear strategic positioning and rational overall structures, and enhance their innovation capacity and international competitiveness, said the statement.
Many centrally administered SOEs have announced or completed plans to merge.
For example, China North Locomotive and Rolling Stock Industry Co and China South Locomotive and Rolling Stock Co merged into CRRC Co, said an announcement on the company's website.
