China will turn all big companies owned by the central government into limited liability firms or joint-stock firms by the end of 2017, as Beijing looks to make its state-owned giants more nimble as part of broader reforms of the capital markets.

The cabinet said on Wednesday that the restructuring will help the firms to set up flexible and market-based operating mechanisms.

The cabinet guidelines, however, did not elaborate whether private capital will be allowed to invest in the state giants or whether they will list shares.

Beijing has been trying to reform state-owned enterprises (SOEs) and to create globally competitive conglomerates in sectors including power generation, railways, shipping and chemicals.

About 90 percent of China’s state-owned firms have already completed such restructuring, which helped improve their governance structures and management, the cabinet said.

But some enterprises owned by the central government have yet to complete restructuring at group levels, it said.

Debt has emerged as one of China’s biggest challenges, with China’s total private and public debt exceeding 250 percent of GDP, up from 150 percent before the global financial crisis,
according to the Organisation for Economic Co-operation and Development (OECD).

China’s corporate debt is about 175 percent of GDP, one of the highest in emerging market economies, according to the OECD, with SOEs accounting for around 75 percent of that.

Efforts will be made to strengthen the Communist Party’s leadership at the big state firms and prevent the loss of state assets during the restructuring, the cabinet said.

China has pledged to push mixed ownership reforms to allow private capital to invest in firms run directly by the central government, and are part of an ambitious revamp of the country’s
sclerotic and debt-ridden state sector.

The central government currently owns and administers 101 enterprises in sectors ranging from nuclear technology to medicine.