* China's reforms shake up centuries-old state monopoly
* Capital, provinces open up salt markets for 1st time
* Reforms to bring consolidation, private cash to sector
By Muyu Xu and Benjamin Kang Lim
BEIJING, Dec 28 From Sunday, China's long
campaign to make sprawling state-owned industries more efficient
will stretch beyond commodities like coal and steel into one of
the most ancient markets of all - the salt trade.
As of Jan. 1, almost 80 salt producers and traders from
across China will be able to sell their wares in Beijing for the
first time ever. The capital is implementing plans drawn up
earlier this year by central government to dissolve a monopoly
that goes back centuries.
As part of its liberalisation commitment, the government has
said it will encourage consolidation among sales wholesalers and
producers - there are more than 2,000 salt makers in China,
according to the China Salt Association - as well as the
injection of private cash into state-controlled firms.
"The salt industry will be consolidated in the coming
years," an industry regulator told Reuters, requesting
anonymity. The regulator declined to say how many salt makers
might be merged or shut down.
Under new rules published by Beijing's Municipal Commission
of Commerce this week, some 79 registered traders from other
provinces who will be allowed to enter the city's market
alongside 16 Beijing-based wholesalers.
The capital is one of 13 cities and provinces stretching
from Tianjin to Inner Mongolia that have received approval from
central government to open up their edible salt markets to other
regional producers and wholesalers who were previously
restricted to operating in their local areas. Other regions of
China are awaiting the green light to do the same.
The changes are designed to dismantle price controls and
distribution channels in a business dominated by the state-owned
China National Salt Industry Corp, which had revenue of 21.25
billion yuan ($3.1 billion) in 2015, down from 32.43 billion
yuan a year earlier, according to an online company statement.
One of its subsidiaries - Beijing Salt Industry Corp -
currently controls the capital's salt market.
Until now, salt producers have sold their wares to
state-owned distribution companies. China produced 88 million
tonnes of salt last year, 10 percent of which was edible salt,
according to the China Salt Association, the rest being
snow-melting industrial salt.
The government has said it will monitor the market and
intervene to stabilise prices if anomalies occur. The
authorities will also ensure stocks are available to support
demand for at least one month.
No new licenses for producers or wholesalers will be granted
to edible salt market until the end of 2018, the central
government has said.
($1 = 6.9552 Chinese yuan renminbi)
(Additional reporting by Beijing newsroom and Zhang Lusha;
Writing by Josephine Mason; Editing by Kenneth Maxwell)