China's State Council approved China Huaxing Group's merger with Guoxin Asset Management Company, the China News Service reported Tuesday.

Shao Ning, vice chairman of the State-owned Assets Supervision and Administration Commission (SASAC), said the merger signals the start of Guoxin's asset management work, according to the report.

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Guoxin, established at the end of last year, has registered capital of 4.5 billion yuan ($692.57 million). The company provides a platform to package some unprofitable State-owned enterprises (SOEs), restructure them and help them earn money.

The Chinese government has been promoting the restructuring of centrally-administered SOEs for years. During the five years before the establishment of Guoxin, there was an average of about 10 small central SOEs being integrated into large enterprises every year. Before Huaxin's integration, the total number of central SOEs decreased from 196 to 121.

But the restructuring of the central SOEs still lag behind expectations. The SASAC was working to reduce the number of central SOEs to between 80 and 100 by 2010. It is estimated that the restructuring of the central SOEs will accelerate due to the establishment of Guoxin, according to the report.