(Yicai Global) Aug. 3 -- The head of China's largest railway operator, China Railway Group Ltd [HK:0390], recently met with China's two Internet giants Alibaba Group Holding Ltd. [NYSE:BABA] and Tencent Holdings Ltd. [HKG:0700], conveying the hope that the two companies will participate in the mixed ownership reform of this large state-owned enterprise (SOE), media reported.

Mixed ownership reform allows private and foreign capital to participate in the reorganization of Chinese SOEs and become shareholders. 

The 2014 Report on the Work of the Government of the State Council proposed to "accelerate the development of a mixed ownership economy." The integration of SOEs and private enterprises is thus coming under the spotlight in the new-round of reform. 

Lu Dongfu, party committee secretary and general manager of China Railway, met with Jack Ma and Pony Ma in May and July, respectively, and told them that Alibaba and Tencent are welcome to participate in the capitalization, equitization and securitization of high-quality railway assets and mixed ownership reform of railway enterprises, Securities Daily reported today.

Another large SOE, FAW Group Corp., is also encouraged to participate in the capitalization, equitization and securitization of high-quality railway assets and mixed ownership reform of railway enterprises, Lu said recently. Experts have speculated that 'China Railway's mixed ownership reform may see substantial progress in the second half of this year.'