China will reduce the number of state-owned enterprises (SOEs) managed by the central government by almost half by 2010, said China's state-owned assets watchdog on Wednesday.

Only 80 to 100 central government SOEs will remain by 2010 after restructuring of the current 161 SOEs, said Shao Ning, vice director of the State-owned Assets Supervision and Administration Commission (SASAC).

"Internal restructuring and integration are effective ways to improve corporate control and cohesion," said Shao.

Many of China's central SOEs were formed through administrative fiscal transfers from the government, the army or scientific institutions affiliated to government departments, or by industrial restructuring.

The SOEs have been challenged by lack of internal controls, as parent companies that manage them had no investment in them, said Shao.

The central SOEs have to turn themselves into competitive enterprises and better management and control systems have to be established after restructuring, said Shao.

SASAC has been promoting restructuring of central SOEs which numbered 196 in 2003.