Two of China's largest shipping companies may be merged as part of a restructuring plan for State-owned enterprises (SOEs), media reports said on Monday.

China may merge China Ocean Shipping Group, known as COSCO, the largest shipping company in the country by fleet size, with China Shipping Group, according to a Bloomberg News report that cited unidentified people familiar with the matter.

If not a full merger, the government could instead combine some of their businesses, the report added.

Several arms of the two shipping giants halted trading in their shares pending an announcement on Monday in Shanghai and Shenzhen, as well as in Hong Kong, where some are also listed.

"China's shipping sector has been the poster boy for over-investment and overcapacity," Bloomberg Intelligence Chief Asia Economist Tom Orlik was quoted as saying in a research report.

"Any restructuring which addresses that problem would be a step in the right direction," Orlik said.

The possible integration has been strengthening market expectation of accelerated SOE reform, said a report written by  China International Capital Corp analysts led by Wang Hanfeng, Bloomberg reported on Monday.

The nation has already merged its two largest train producers, China CNR Corp and CSR Corp, which are also State-owned, into a conglomerate known as CRRC Corp.

That move, which the government announced in December 2014, was intended to prevent competition between the two as China vies for lucrative rail contracts overseas against industry giants, such as Germany's Siemens AG and Bombardier Inc of Canada.

Merger speculation surrounding other major SOEs has intensified as the world's second-largest economy tries to reform the government-backed heavyweights that dominate its economy to boost stalling growth.

The Xinhua News Agency reported in April that China was considering merging scores of its biggest SOEs to create about 40 national champions, compared with the existing 111.

Total revenue from centrally administered SOEs dropped 7.1 percent year-on-year to 13.21 trillion yuan ($2.16 trillion) in the first half of 2015, according to data the Ministry of Finance released on July 21.