More State-owned enterprises might be spun off as private entities to help improve economic growth, but Beijing will maintain control over major industries, a Cabinet official said Thursday.

Regulators are working on plans to overhaul ownership following the ruling party's pledge to increase competition in State-dominated industries last month, said Huang Shuhe, vice-chairman of the State-owned Assets Supervision and Administration Commission of the State Council, the country's top regulator of SOEs.

Economists say that Beijing must curb the dominance of State companies that control swaths of the economy, from banking to oil to steel production, or risk seeing China's growth rate plunge. The development blueprint issued last month released guidelines to open up more industries to competition, although it also said that State ownership will remain at the core of the economy.

Huang did not say which companies or industries might be affected. The 117 companies controlled by the Cabinet range from areas regarded by many countries as strategic, such as oil or telecommunications, to travel agency and a food processor. They include oil giant PetroChina Ltd, phone carrier China Mobile Ltd and four of the world's biggest banks.

"State-owned industries that don't require State ownership can allow more 'social capital'," Huang said at a news conference, using the ruling party's euphemism for private investment. "State ownership could be reduced or entirely withdrawn."

Huang stressed that would apply to only some companies. He said those deemed "vital to national security" - a segment the government previously said includes a wide range of companies - would remain entirely State-owned.

China's economic growth slumped in the second quarter to a two-decade low of 7.5 percent. It rebounded to 7.8 percent the following quarter, but analysts said that was due to increased government spending, and growth could fade again this quarter or early in 2014.

In the first 11 months of the year, debts of SOEs climbed 14.5 percent to 59.26 trillion yuan ($9.76 trillion), according to a report released by the Ministry of Finance on Thursday.

Huang said China will promote a mixed-ownership economy by diversifying the shareholding structure of SOEs and speed up the transformation of SOEs, especially parent companies, into joint-stock firms. It also will improve the shareholding structure of SOEs.

Some SOEs, State-owned capital investment companies and capital operating firms that are vital to national security will be wholly invested by State-owned capital, according to Huang.

"Absolute majority shares can be held by State-owned capital for SOEs in major industries and key fields that are the lifeblood of the economy," Huang said.

State capital can hold a relative majority of shares for important SOEs in pillar sectors and new-technology and high-tech industries.

It can hold minority shares in or totally exit from SOEs that do not have to be controlled by State capital and whose majority shares can be held with capital from other sources.

"We will encourage qualified SOEs to reorganize and become listed through various forms. SOEs that are not qualified for going public can diversify shareholding by introducing different kinds of investors," Huang said.

The commission will prioritize the work to develop a mixed-ownership economy, he said. "Since its establishment, the SASAC has actively encouraged SOEs to introduce private capital during their reorganization."

By the end of 2012, 378 listed companies were controlled by centrally administered SOEs and their subsidiaries, while the stake of those firms held by the non-State sector accounted for more than 53 percent of the total.

Meanwhile, non-State capital held more than a 60 percent stake in 681 listed companies controlled by locally administered SOEs by the end of last year.

But as the representative of investors, the functions and responsibilities of SASAC have not changed, according to Huang.

"This signals a transformation for the role of SASAC as it will no longer directly administer SOEs' investment activities, asset allocation or business strategies," said Han Baojiang, deputy director of the economic department at the Party School of the CPC Central Committee.

"The SASAC will focus on supervising and managing capital gains of State-owned capital operating/investment companies," said Han.

Huang said the commission will deepen the reform of the SOE management mechanism and further improve the modern corporate system.

It also will strengthen State-owned asset management by steering the focus of supervision from SOEs' operations to the use of State-owned capital and increasing the percentage of State capital earnings that is given to central finance.

The proportion of State-owned capital gains that goes to public finance will reach 30 percent by 2020, up from 5 to 15 percent for most SOEs.

The Associated Press and Xinhua contributed to this story.

[email protected]