Potential exists for expansion 　　China's State-owned enterprises (SOEs) should become more self-reliant to survive fierce market competition. 　　Zheng Silin, vice-minister of the State Economic and Trade Commission, told participants at an ad hoc seminar on January 15, "Although the central government's 1998 policies to expand domestic demand, to readjust the economic structure and improve the economic environment will help this year, enterprises still face difficult market circumstances, cut-throat competition and export pressures brought by the Asian financial crisis." 　　Zheng urged the SOEs to explore their available potential to turn losses into profits. 　　The seminar was co-sponsored by the trade commission and the Publicity Department of the CPC Central Committee. Reform of SOEs is a top priority of the Chinese Government in 1999 and is considered crucial for solving problems of deficit-ridden large and medium-sized State-owned enterprises by 2000, Zheng said. About 49 percent of the country's large and medium-sized SOEs are losing money, according to seminar sources. 　　Profits made by the State sector during the January-October period stood at 23.5 billion yuan (US$2.83 billion), a huge 59.5 percent dive from the corresponding period in 1997, commission statistics indicated. 　　"No external support could replace the strenuous efforts of the enterprises themselves," Zheng said, adding that the way to reverse deficiencies lies largely in the firms themselves. The vice-minister said Handan Iron and Steel Co is a good example. 　　Like many other SOEs, the colossal company, founded 40 years ago in north China's Hebei Province, was affected by the Asian financial crisis and shrinking domestic demand last year. Instead of holding its hand out to the government, the company, by working hard to optimize its industrial structure and product mix and by curtailing production costs, was able to earn 504 million yuan (US$60.72 million) in profits, cementing its leading role in the country's steel trade. Executives of a chain of former money-losing SOEs, including the Wuyang, Chongqing and Shuicheng steel and iron companies, yesterday told seminar participants they achieved better performances after drawing on Handan's experience. "The practice suggests that the government's goal of turning around most of the deficit-ridden large and medium State firms by next year is attainable," said Zheng. Economicnews 1999-01-15 Page2 Full Story in Chinese