China is expected to reach its three-year goal of reforming state-owned enterprises (SOEs) by the end of this year, according to experts. The main goal is to enable SOEs to reduce losses and increase profits.
In the first nine months of this year, the balance sheet showed that state-owned enterprises and state-owned shareholding firms earned a total profit of 160.9 billion yuan (US$19 billion), China Central Television reported.
And at the end of October, the production growth rate of state-owned enterprises was maintained at approximately 8.3 percent.
In the same period, loss reduced by state-owned enterprises was at a rate of 0.3 percentage points larger than the average in the rest of the country.
Yu Bin, deputy director of the Enterprise Research Institute, which is under the State Council, was quoted in saying that "by the end of this year, the basic goal of reforming state-owned enterprises and solving their difficulties can be reached".
The goal, set in 1998, was to free a great majority of large and medium-sized state-owned enterprises from financial difficulties in three years.
The building of a modern system of enterprises is another aspect of the goal.
When asked what factors had contributed to the success of the reform, Yu mentioned four reasons:
-- In the past few years, the government had adopted policies to support state-owned enterprises so that they can increase their economic benefits.
The policies include turning debts into shares, diversifying the flow of laid-off workers, freeing State-owned enterprises from societal obligations, cutting interest rates and subsidizing technological innovations.
-- Since the beginning of this year, international oil prices have been high.
This condition has benefited China's petrochemical industry and, therefore, increased the overall economic benefit to state-owned enterprises.
-- Since early this year, China's economy has improved as a result of the growth in export, investment and consumption; consequently, the increased demand and quickened economic growth rate have created a good macroeconomic environment for the development of state-owned enterprises.
-- The self-improvement made by state-owned enterprises in management, reducing cost, improving product quality, providing after-sale service and increasing competitiveness in recent years has allowed state-owned enterprises to increase economic benefits.
As a result of the reforms, some state-owned enterprises have become shareholders and some are listed on the stock market.
(China Daily 12/09/2000)
