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China’s CITIC Group to cut expenses by $1.4 bln -document

BEIJING, Aug 6 (Reuters) – State-owned Chinese conglomerate CITIC Group Corp aims to cut 10 billion yuan ($1.44 billion) in administrative expenses this year to counter an economy weakened by COVID-19, according to a internal document seen by Reuters on Thursday.

The group aims to reduce administrative costs across all units by more than 10%, according to a document dated in July outlining the initiative, which will cut expenses from business travel to hospitality.

Such goals are to remind employees of the current “tough days” and “to actively deal with the internal and external change of the environment,” the group wrote in the document.

The initiative will be led directly by top leadership including Zhu Hexin, the group’s newly appointed chairman and a former vice governor of the central bank, and Xi Guohua, the group’s new president, the document showed.

The document was verified by two sources with direct knowledge of the matter.

CITIC Group did not immediately respond to a Reuters request for comment.

State-owned enterprises have been told by the government to cut costs and make sacrifices for the economy to deal with the economic fallout of the pandemic.

Founded in 1979, CITIC has more than 7 trillion yuan in assets and is involved in businesses including finance, energy, manufacturing and real estate.

Its Hong Kong-listed entity CITIC Limited reported HK$53.9 billion yuan ($6.95 billion) in profit last year, according to its annual report, generated mainly by its financial business.

($1 = 6.9448 Chinese yuan renminbi)

($1 = 7.7502 Hong Kong dollars) (Reporting by Kevin Huang and Ryan Woo; Writing by Cheng Leng)

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