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Thursday, December 02, 1999, updated at 13:58(GMT+8)
Business SOEs Seen From 'Three Differences'

The time for realizing the goals of accomplishing the reform of State-owned enterprises and lifting them out of difficulties in three years is drawing near. Although there are still many difficulties, it is not hard to discover that people tackling major, difficult tasks in the forward position have strong confidence in achieving the objectives, this can be clearly seen at the National Economic and Trade Working Conference held in late November this year.

This report is written by Our Staff Reporter Liu Gongjian about the reform and development of State-owned enterprises SOEs). It is highlighted as follows:

Chen Zhenggao, deputy governor of Liaoning Province, said,"I've found 'three differences' between the meeting I attended this time and those I attended several years ago", adding "these are differences in atmosphere, in feeling and in understanding. After 45 months of efforts, by October this year, State-owned and State-owned holding industrial enterprises in the three northeast provinces (Liaoning, Jilin and Heilongjiang) had all brought about a turn from deficit to profit. In the first 10 months, Liaoning's State-owned and State-owned holding industrial enterprises registered 640 million yuan of profits, an unprecedented achievement in the past four years in our province."

Li Jieche, deputy governor of Jilin Province, had the same feeling. He said, "there has been a notable improvement in the economic benefits in our province's State-owned and State-owned holding industrial enterprises. Between January and October, Economic benefit had changed from a net deficit of 1.02 billion yuan in last year's same period to a net profit of 0.71 billion yuan, something unheard of in our province since the beginning of the 1990s."

Zhang Chengyi, deputy governor of Heilongjiang Province, said, "between January and September, our province's State-owned and State-owned holding industrial enterprises earned 11.473 billion yuan of profits, up by 77.66 percent over the same period of the previous year, with notable economic results."

In the opinion of most conference participants, viewed from the general results, the profits the nation registered in the first 10 months of this year were over 40 percent higher than the anticipated target; judged from different industries, most industries, with the exception of coal and military industrial sectors, earned increased profits, reversed and reduced losses, it is possible to attain or surpass the profit target set for the year.

Between January and September, the net losses of textile industry had dropped to 0.694 billion yuan, a loss reduction of 3.865 billion yuan compared to the same period of the previous year. An end will be put to the six year-old situation of loss by the end of this year and an all-round reversion of losses will be realized. Viewed from the regional situation, 26 provinces, autonomous regions and municipalities had registered better, notable economic results in the first nine months this year than in the same period last year.

Regarding the question why conference participants had got the impression of "three differences", most conference attendees said the most fundamental factor lay in the correct policies of the Party Central Committee. They said in order to complete the reform of SOEs and get them out of difficulties in three years, the Party Central Committee and the State Council have adopted very effective policies and measures. These policies and measures involve such fields as planning, finance, banking and foreign trade. These are complete sets of reform measures and efforts have been constantly intensified to implement them.

Leading members from some regions and enterprises said feelingly that General Secretary Jiang Zemin this year has paid six inspection tours to State-owned enterprises nationwide and delivered important speeches there, this has greatly inspired SOE cadres and workers. In the past two years, leaders of the Party Central Committee and the State Council have repeatedly led responsible members of the State Economic and Trade Commission, and of other ministries and commissions under the State Council to go to the lower units to do collective on-the-spot office work, give concrete coordinated commands and make concentrated solutions of problems. These scenes are still visible before their eyes. The leaders came to grips with industries, regions and enterprises one by one. They said, "without the correct policies of the Party Central Committee, without the deep-going and painstaking work style of the leaders of the Party Central Committee and the State Council of grasping implementation of these policies, it would be hardly conceivable for SOEs to have achieved such great successes in two years under so complex and difficult economic situation at home and abroad.

Shanghai Deputy Mayor Jiang Yiren told this reporter, "Comrade Jiang Zemin had noted several years ago that Shanghai should lead the country in the establishment of a modern enterprise system. Now the municipality has made fruitful exploration in regard to the basic framework for the modern enterprise system, it has combined the establishment of a modern enterprise system with the optimization of the industrial structure, and has thus given a boost to Shanghai's effort to accomplish the reform of SOEs and lift them out of difficulties in three years Over the past few years, 1,028 enterprises have been declared bankrupt, closed down and amalgamated. This move has speeded up the concentration of production elements in superior enterprises, optimized the enterprise structure and improved enterprises' overall quality."

Beijing Deputy Mayor Liu Haiyan said, "Between January and October, the city's State-owned and State-owned holding industrial enterprises registered an added value of 33.08 billion yuan, up by 12 percent over the same period of the previous year, this is the result of learning from the experience of Handan Iron and Steel Company in reducing cost, and implementing the central government's instruction that Beijing should speed up the establishment of high and new technological industries.

Delegates from the textile industry said, "In summing up the past two years' work, we have gained the following personal experience: We must implement the central government's decisions to the letter, the key to this is the determination made by the governments of provinces, autonomous regions and municipalities, and the most important thing for this is the establishment of a responsibility system."

The participants were well aware that the notable achievements made in reforming SOEs and lifting them out of difficulties are only phased gains, far from being decisive successes, the road is long and the task arduous.

Shanghai Municipal Economic and Trade Commission Director Huang Qifan bluntly pointed out, "without further structural readjustment, there would be no industrial upgrading and it would be impossible to fundamentally lift SOEs out of difficulties. We should make readjustment amidst development and further deepen reform in the course of development and readjustment. The Fourth Plenary Session of the 15th CPC Central Committee and the just concluded Central Economic Working Conference have clearly pointed out the orientation for the reform of SOEs and getting them out of difficulties.

Conference participants were of the view that we should have some things done and others undone. They pointed to the need to control the aggregate of the coal, metallurgical and sugar refining industries. Chen Shineng, director of the State Administration of Light Industry, said, "the present international price of sugar is over 2,000 yuan per ton, while our purchasing price of beetroots ranges between 2,000-3,000 yuan, it will cost over 4,000 yuan to produce one ton sugar, this means a loss of more than 2,000 yuan to sell one ton of sugar."

Shenzhen City started earlier experimentation with the modern enterprise system. Deputy Mayor Guo Rongjun said about State-owned and State-owned holding enterprises in this way: "In Shenzhen, the State-owned and State-owned holding industrial enterprises have played a very good controlling, impelling and penetrating role in the field from the "Vegetable Basket and Rice Bag projects" that affect the national economy and people's livelihood to the field of major infrastructure facilities.

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