(Yicai Global) July 8 -- China's cabinet the State Council has approved the restructuring of China Poly Group and China Silk, which will be transferred in its entirety to the former without compensation.

China Silk will also break free from the direct supervision of the State-Owned Assets Supervision and Administration Commission -- the agency that oversees Chinese central enterprises -- according to SASAC's website.

Beijing-based China Silk was previously the only silk-focused central enterprise group that the SASAC directly supervised. It was formerly the China Silk Company the Nationalist Government set up in Shanghai in 1946. It is one of the oldest and largest Chinese firms that imports and exports silk.

China Poly Group was founded in 1993 and is a large central enterprise that SASAC administers. The group's revenue topped CNY300 billion (USD43.5 billion) last year, and it posted over CNY40 billion in profit. Its total assets exceeded CNY1 trillion (USD145 billion) as of the end of last year.

The firm mainly engages in international trade, real estate development, light industry research and development and engineering services, management services of processes, raw materials and products, cultural and artistic management and civil explosives production and sales and services, as well as provision of financial services.

The Beijing-based company has five listed arms, both at home and abroad.

The statement disclosed neither the reason for Poly Group's takeover nor the size of the assets transferred by China Silk. Chinese regulators generally allow more capital-intensive companies to merge with smaller ones to enhance their competitiveness.

Editor: Ben Armour