BEIJING, CHINA - China will concentrate more power in the hands of fewer auto and steel companies, the government has said in unveiling its most concrete plans yet for reform of the two industries.

The State Council, or cabinet, said it would push five steel makers and two or three car companies to take dominant positions in their respective industries.

The cabinet, in statements posted on the government website www.gov.cn late on Friday, also named which companies China would encourage to lead the consolidation.

Among carmakers, China called on FAW <000800.SZ>, Dongfeng <0489.HK>, Shanghai Automotive Industry Corp <600104.SS> and Changan <000625.SZ> to make acquisitions nationwide.

It said that Beijing Automotive Industry, Guangzhou Automobile Group, Chery Automobile and China National Heavy Duty Truck should spearhead regional efforts.

In steel, Baosteel Group, parent of Baoshan <600019.SS>, Anben Iron and Steel and Wuhan Iron and Steel were tapped to be the three biggest players, producing 50 million tonnes or more a year.

Overall, it said that more than 45 percent of steel output in China, the world's biggest steel producer, should come from the top five companies.

China first announced stimulus plans for its steel and auto sectors in January as part of a support package for industries identified by the government as key to economic growth.

The plans have offered some assistance to help companies weather the financial crisis, including tax cuts and consumer subsidies, while also laying out longer-term objectives for industrial restructuring.