(Adds context, details on share price moves)
SHANGHAI, June 29 (Reuters) - The China National Machinery Industry Corp (Sinomach) will merge with The China High-Tech Group, the country's state asset regulator said on Thursday, part of China's ongoing efforts to slim down its bloated state sector.
China's cabinet had already approved the merger plan, which will make China High-Tech a subsidiary of Sinomach, the State Asset Supervision and Administration Commission (SASAC) said in a notice. Sinomach makes construction and agriculture equipment, while China High-Tech is a textile machinery manufacturer.
The merger comes as Beijing looks to streamline the number of state-owned enterprises (SOEs) and to create globally competitive conglomerates in sectors including power generation, railways, shipping and chemicals.
The latest move reduces the number of enterprises under the direct administration of the central government to 101, down from 117 since 2012. The number of SOEs could eventually fall to about 40, state media has reported.
Sinomac's listed subsidiaries rose on the news of the merger, with Sinomach Automobile Co Ltd up over 5 percent and Luoyang Bearing Science & Technology Co Ltd up over 4 percent.
China Camc Engineering Co Ltd, First Tractor Co Ltd, Sinomach General Machinery Science & Technology Co Ltd, Linhai Co Ltd and Lanpec Technologies Ltd were all up around 2 percent.
Reporting by David Stanway and Adam Jourdan; Editing by Richard Pullin & Shri Navaratnam