SHANGHAI -- The two main press groups in Shanghai, birthplace of China's newspaper industry, officially launched a new group on Monday following their merger.

Shanghai Newspaper Group, product of a merger between Shanghai Jiefang Daily and Wenhui-Xinmin United Press, is now China's largest press group with estimated assets of 20.8 billion yuan($3.4 billion), according to a statement issued by the group.

Party secretary of the new entity, Qiu Xin, also chief of the group, said, "the consolidation of the two groups is in accordance with the industry's law of development and in response to waves of media transformation."

Han Zheng, secretary of the Shanghai Municipal Committee of the Communist Party of China(CPC), said mainstream newspapers must catch up with new media to convey the government message, and reflect the opinions of ordinary people. The move is essential to confront the challenges of the a new environment.

Li Liangrong, professor of journalism at Shanghai's Fudan University, said "Shanghai has taken a great step in resource integration, seeking new space and new horizons."

The two groups occupy almost the entire print media market in Shanghai. Wenhui-Xinmin United Press Group owns 17 newspapers and journals, including Xinmin Evening News, the first evening newspaper on the Chinese mainland, which started operation in 1929.

Jiefang Daily Group owns 12 newspapers and journals, including Jiefang Daily, established in 1941, and once the official newspaper of the Central Committee of the CPC.