A senior Chinese official said here Wednesday that China will
take five measures to promote the restructuring and reorganization
of the country's state-owned enterprises (SOEs).
Li Rongrong, minister in charge of the State-owned Assets
Supervision and Administration Commission (SASAC) of China's State
Council, made the remark at an international merger and acquisition
summit, which opened in Beijing Wednesday.
Li said China welcomes more foreign and domestic private capital
to participate in China's SOE reform, as China's market economy
advances, reform and opening expand, legal systems and capital
market improve.
According to Li, the first of the five measures is to encourage
more SOEs to list in the domestic market by introducing domestic
and foreign investment.
The second is to give full play to the role of China's large
SOEs in the process of merger and acquisition, striving to
cultivate and develop some enterprise groups with international
competitiveness, Li said.
Thirdly, more SOEs who lose to the competition on the market
will have to leave the stage. China will speed up the process by
establishing a quitting mechanism and a system of elimination
through selection or contest especially for the SOEs.
China will continue to encourage more SOEs to invest abroad, set
up branch factories in other countries and participate in
international merger and acquisition. To that end, China will
further improve consultation service, legal protection and the
international adjustment system for overseas investment, said Li,
when listing the fourth measure.
Li said the last measure is to create opportunities for foreign
enterprises to participate in the merger and acquisition of China's
SOEs, by improving relevant merger and acquisition laws and
establishing a modern property rights system and market.
Li said great achievements have been made in the process of
adjusting the layout and structure of China's state economy, an
important part of China's economic reform started in the late
1970s.
According to Li, at present, a group of large enterprises have
emerged in China, and by 2002, 11 Chinese SOEs have entered the
global top 500 list.
China's SOE reform has also made progress, said Li. By 2002,
more than half of China's 159,000 SOEs had launched their
enterprise reform, with some enterprises suffering long-term losses
and in heavy debt and some exhausted mining sites having all quit
the market.
About 85 percent of China's small SOEs have realized multi-level
property rights through reforms, said Li.
He added that though nearly half of China's SOEs have been
closed, the total profits they made had increased from the 83.8
billion yuan (10.1 billion US dollars) in 1995 to 220.9 billion
yuan (26.7 billion US dollars) in 2002.
Li said China is facing many favorable conditions for the
adjustment of the layout and structure of the state economy, like
the establishment of the SASAC, the increasing proportion of the
non-public economy, and the abundant capital for merger and
acquisition from global investors.
But he also mentioned some irrational problems existing in the
economic reform process, such as the still high proportion of
processing industry and common service industry in the state-owned
economy, the small scale of China's SOEs and the bankrupt SOEs that
have not yet closed.
(Xinhua News Agency November 20,
2003)