Goldman Sachs, US private equity giant Warburg Pincus, and six other firms remain in the race to pick a stake in China Huarong Asset Management, a state-owned agency established to clear bad debts in China's banking sector.

Goldman Sachs, US private equity giant Warburg Pincus, and six other firms remain in the race to pick a stake in China Huarong Asset Management, a state-owned agency established to clear bad debts in China's banking sector, Reuters reports.

China Huarong has short-listed eight suitors, including a unit of Deutsche Bank, private equity firm Apax Partners and Malaysia's sovereign wealth fund Khazanah Nasional, unnamed sources told the news service.

Huarong is looking to offload a 15 to 20 per cent stake to strategic investors ahead of a planned floatation. The firm hopes to raise over $2 billion to buy stressed loans and surrendered assets from firms unable to repay lenders, the report said.

Final bids are due by around mid-April, and winning bidders are expected to be chosen around June. About 20 suitors evinced interest in the initial round.