Commentary: Unswervingly Deepening SOE Reform

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Last updated at: (Beijing Time) Thursday, December 13, 2001

Commentary: Unswervingly Deepening SOE Reform

The People's Daily publishes a commentary Thursday encouraging further reform of state-owned enterprises (SOEs). While listing the remarkable achievements made so far in SOE reform, the commentary mainly focuses on how to deepen the reform and make new progress.

Today, People's Daily publishes on page 5 a commentary on the reform of State-owned enterprises (SOEs).

The commentary says since the beginning of this year, on the basis of the basic attainment of the goals for the reform of SOEs and getting them out of difficulties in three years, the economic efficiency of SOEs has continued to improve. Practice proves that although there exist many difficulties in promoting SOE reform and development, there are, however, full of hopes.

The successful experiences gained by the Tianjin Pharmaceutical Industry Co. Ltd., the Guangdong Nuclear Power Group Company and three other firms in deepening reform and strengthening management represent the orientation of SOE reform and development.

Earnestly strengthening construction of a modern enterprise system is an important experience gained by these enterprises in winning successes. The commentary calls on all large and medium-sized enterprises to exert themselves to establish a standard modern enterprise system, with the emphasis being placed on pressing ahead with transformation of enterprises based on a shareholding system and in line with the principle of "clearly established property rights, well defined right and responsibility, separation of government administration from enterprise management and scientific management".

The commentary stresses the need to put internal reform and strengthened management in a prominent position in the course of deepening SOE reform. It adds that through deepening enterprise internal reforms of personnel, labor and distribution systems, effective incentive and restraint mechanisms for enterprise managers should be gradually established. Informationization of enterprises is an effective measure for solving the outstanding problem concerning enterprise management, the commentary notes.

The commentary attributes the rapid development achieved by these enterprises in recent years amidst ever-fiercer market competition to the fact that they have paid great attention to technical renovation. Practice over past years indicates that carrying out technical renovation of existing enterprises, instead of building new ones, can help revitalize larger stock with less increment and bring about quick result and high returns with less investment. The commentary points to the need of upgrading traditional industries with high and new technology and advanced and applicable technologies and enhance enterprises' technically innovative capability and market competitiveness.

In a period of time to come, SOE reform will remain the central link in the reform of the entire economic structure and is an important yet arduous task facing us. China's WTO entry will mean both challenge and a development opportunity for SOEs. They should fully understand this.

And it is inevitable that some industries, enterprises and products will sustain impacts within a short period of time. Notwithstanding, so long as we take Deng Xiaoping Theory and the spirit of the Party's 15th National Congress as the guide, deepen our understanding of the law governing the reform and development of State-owned enterprises, turn pressure into a driving force, strengthen management, quicken structural readjustment, accelerate technological progress and innovation, and improve enterprise international competitiveness, we will certainly be able to continue deepening the reform of State-owned enterprises.

By People's Daily Online

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