China Revamps Citic for a Jolt of Capitalism

In 1979, China’s paramount leader, Deng Xiaoping, sat down with some old industrialists who’d survived the revolution for a lamb hot pot. The conversation, in a room shrouded in cigarette smoke, was about invigorating the economy, and the brainstorming gave rise to Citic Group, the state-owned investment company at the forefront of China’s experiments with economic and financial liberalization. The conglomerate has grown into the nation’s biggest diversified company, with total assets of $669 billion at the end of 2013, according to the company, and interests in everything from real estate to banking to golf.

The government is turning to Citic again to shake up the economy. In a plan announced in March and to be completed by August, $36 billion of Citic’s assets from at least 29 subsidiaries will be transferred to its Hong Kong unit, Citic Pacific, to create a new company, Citic Ltd.