China's largest publishing house intends to transform itself from a propaganda vehicle into a global player as it spearheads Beijing's plans to restructure the industry while keeping it under state control.

Nie Zhenning, president of the China Publishing Group, told the Financial Times that he hoped Beijing would regroup the publishing industry into two state-owned conglomerates. After an initial public offering, Mr Nie's company would then seek to acquire players at the provincial level.

The state publisher expects to raise up to Rmb1.8bn ($264m) in an IPO in Shanghai this year and has lined up three lead investors: an e-reader technology company, a film production company and an investment fund.

China Publishing Group, which had Rmb3.9bn in revenues in 2008, is a cornerstone of Beijing's policy to keep publishing under state control while allowing private investors a limited, but legal, role.

“There will definitely be significant changes in our international operations,” Mr Nie said. “At least we can learn from some multinational publishers from developed countries, like Oxford University Press and Harper Collins . . . We will not just be there to propagate Chinese culture, but also to run a commercial business.”

Last year, the General Administration of Press and Publication, the regulator, promised to dilute the state publishing houses' monopoly by allowing private companies to produce books for the first time in more than half a century.

Private publishers have long outperformed state rivals in spotting and producing best-selling manuscripts, but they operate in a legal grey area. Chinese law excludes them from publishing books, so they have to buy or rent International Standard Book Numbers from the state companies. Mr Nie said he would seek to greatly expand this kind of partnership.

By taking up projects developed by others, the company would follow a business model adopted by major US enterprises such as Procter & Gamble, the US consumer goods group, and Bell Labs, the research arm of Alcatel-Lucent, Mr Nie said.

In preparation for its IPO, China Publishing Group has set up a holding company that will control most of its subsidiaries. These include China National Publications Import & Export (Group) Corporation, the subsidiary that administers part of the state monopoly over foreign publications in China.