Beijing to Rejuvenate SOEs through Foreign, Private Investment

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Last updated at: (Beijing Time) Friday, July 18, 2003

Beijing to Rejuvenate SOEs through Foreign, Private Investment

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The doors of state-owned enterprises (SOEs) in Beijing, the national capital, have opened to both foreign and Chinese private investors, according to an announcement from the Beijing municipal government.

Vice Mayor Lu Hao said Thursday that the city had selected 104 well-performing state-owned industrial enterprises to attract bothforeign and private investors to participate in regrouping the SOEs, in a bid to further the reform of its state sector.

The move is aimed at gradually withdrawing the state capital from certain industrial fields, boosting investment into the statesector and invigorating the SOEs, Lu said.

The selected enterprises are in the fields of electronics, machinery, medicines, light industry, textiles and building materials. More than 90 percent of them were profitable in 2002.

With 75,521 employees, these 104 enterprises boast a combined capital of 25.2 billion yuan (3.05 billion US dollars) and register 12.1 billion yuan (1.46 billion US dollars) in sales volume annually.

With the debt ratio being below 100 percent, none of these enterprises has a long-term record of losing profits, according toZhou Yuqiu, deputy director of the city economic committee.

Zhou said investors could take over stock ownership and property rights of the selected SOEs and enterprises whose shares are under state control, take over all or part of the creditor's rights and capital of the selected SOEs or input funds into those whose shares are under state control to increase their capital stock.

Vice Mayor Lu said that foreign investors are permitted to control 100 percent of SOEs capital stock.

Beijing has 260 SOEs and enterprises whose shares are under state control. Of the total, 74 are affiliated to the central government and 186 are attached to the Beijing municipal government.

The combined capital of Beijing's 186 state-owned large and medium-sized enterprises stand at 188.2 billion yuan (22.76 billion US dollars). They made post-tax profits totaling 2.4 billion yuan (290 million US dollars) in 2002.

Policies regarding the foreign and private investment in SOEs and the arrangement of redundant employees of the SOEs are being drafted by the city government and are expected to take effect soon.

Lu Hao said that all Beijing enterprises are open to both foreign and private investors.

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