HARARE, April 23 -- China has applauded Zimbabwean government's recent move to cap salaries of state enterprise bosses, saying the Southern African country needs to reform and further strengthen management of state enterprises to improve their viability.

Zimbabwe recently ordered a ceiling of 6, 000 U.S. dollars per month for state-owned businesses' senior managers, who had allegedly bagged twice the amount when their employees were delayed even minimum wages.

Many of the once formidable state firms including Air Zimbabwe and National Railway of Zimbabwe had been struggling to survive due to harsh business environment and mismanagement.

Chinese Ambassador to Zimbabwe Lin Lin said state enterprises had great potential to contribute to economic recovery in Zimbabwe and become a key pillar of the country's economy if they were radically transformed into efficient entities.

He said policy transparency and confidence building were also critical to successfully reform Zimbabwe's run-down state enterprises which if run efficiently, have capacity to contribute 40 percent to the country's Gross Domestic Product (GDP).

"There is a need to further strengthen the management of state enterprises and improve policy transparency. Recent measures taken by the Zimbabwe government like the implementation of salary ceiling and carrying out result-based management system are applaudable," the ambassador said while addressing delegates attending the international business conference in Bulawayo on Wednesday.

The one-day conference is running on the sidelines of this year' s five-day Zimbabwe International Trade Fair, the country's annual premier trade showcase which ends Saturday.

Several countries around the globe including China, Iran, the United States, Brazil, Egypt, Poland and a host of other African countries are exhibiting at the trade event.

The Chinese ambassador said the government needed to build confidence of state enterprises by ensuring policy consistency.

"Confidence is more precious than gold. It is vital to keep steadfast in developing state enterprises with confidence," Lin said, adding that swaying approaches were detrimental and costly to achieving state enterprises reform.

He said China could provide useful lessons to Zimbabwe on reforming state enterprises as the Asian country had made tremendous achievements over the past few decades by steadfastly implementing state enterprise reforms.

Today, China boasts of a robust state enterprise sector contributing significantly to the country's socioeconomic development.

Among the 2013 Fortune list of top 500 global companies, 85 were from Chinese mainland, 45 from China's central state-owned enterprises, and three of them were in the top ten.

Lin said state enterprises were a strong pillar of China's economy, being involved in critical sectors of the economy such as energy, electricity, infrastructure, transportation, telecommunication, equipment manufacturing and construction.

Apart from being a major contributor of foreign currency, state enterprises were also a strong force in maintaining social stability, he added.

Lin said China was continuing to reform its state enterprises focusing on adjusting strategic layouts, deepening shareholder reform, improving corporate governance and perfecting the management system of state-owned assets and the state enterprise leadership.