View of the People's Bank of China in Beijing. Photo: AFP/Wang Zhao

Beijing is making a big push to deepen state-owned enterprise (SOE) reform this year, announcing on Wednesday that all firms owned by the central government will be converted to limited liability companies or joint-stock firms by the end of this year.

The move consolidates reforms that have been ongoing for years. About 90% of SOEs have already completed the restructuring process, which has helped improve governance structures and management, Reuters reports, citing a State Council statement from Wednesday.

Along with the restructuring push, the most uncompetitive firms, often referred to as “zombie firms” will be allowed to fail. The People’s Bank of China said earlier this year that banks will withdraw support for financially unviable firms that have racked up debt since the 2008 financial crisis.

Despite the push for mixed ownership to allow private capital investment in firms, the government will retain presence in the companies, with the state-owned asset regulator saying that notions such as “privatization” and “de-nationalization” should be avoided.