SINOCHEM Corp, China's biggest petrochemical trader, received state approval to acquire China National Seed Group Corp, in line with government policies for state-owned companies to merge to improve efficiency and cut costs.

Sinochem, which has the country's largest fertilizer sales and distribution network, will gain from China National Seed's research and sales of crop seeds and other agricultural products, the company said in a statement on its Website yesterday.

China urged its 161 state-owned companies to become more competitive by combining their operations, Li Rongrong, director of State-owned Assets Supervision and Administration Commission said.