As the new year is upcoming, the reform and development of State-owned enterprises (SOEs) will also enter a decisive year.

The year 2000 is the final year for realizing the goal set by the Party Central Committee for completing the reform of State-owned enterprises and lifting them out of difficulties in three years, it is also the year of decisive battle. As we review the course of SOE reform and analyze the current situation, we are full of confidence in achieving this strategic goal.

This outgoing year has seen the achievement of rich fruit in SOE reform and development and the greatest efforts ever devoted to SOE reform, regrouping and transformation in the past two years. The profit level of the enterprises nationwide has gone up substantially, the profits of State-owned and State-owned holding industrial enterprises, in particular, has doubled on that of the previous year, the situation is really encouraging.

Attaining the above-mentioned goal means that the majority of large and medium-sized State-owned and State-owned loss-making holding enterprises will have got out of predicament and the majority of large and medium-sized key enterprises will have initially established a modern enterprise system. For us to fulfill this arduous task, we do face some difficulties, such as depressed market demand, intensified competition and long-standing contradictions. For example, the defects, including serious redundant construction and the heavy historical burdens on enterprises, have further revealed themselves and factors restraining enterprise profit level has increased. However, we should also see the existence of favorable conditions, the convocation of the Fourth Plenary Session of the 15th Central Committee of the Communist Party of China (CPC) has formulated a programmatic document on the cross-century development for SOE advancement. This is the most favorable condition for speeding up SOE reform and development. Next year, China's national economy will continue to maintain a relatively rapid rate of growth; the strategic measure implemented by the State for supporting the development of enterprises will continue to play an important role. For instance, it will continue to carry out an active financial policy, "debt-to-equity" transfer, technical renovation and loans extended at lower interest rates. In addition, the international economic environment will turn for the better, the domestic market will develop steadily, and efforts are made to crack down on smuggle and encourage export -all these have created good conditions for enterprise development.

In the face of market challenges and the many difficulties, a large batch of enterprises are engaged in valiant exploration and bold reform and have blazed a trail leading to success through radical market change and fierce competition. Representatives of these are a group of enterprises such as the Zhenhai Oil-Refining Chemical Co. Ltd., the Wuxi Little Swan Co. Ltd., the Shanghai Broadcasting and Television (Group) Co. Ltd., the Guizhou Power Co. And the Shanxi Nanfeng Chemical Group Co. Ltd., recommended and publicized by the Publicity Department of CPC Central Committee and the State Economic and Trade Commission. The success of these enterprises has helped enhance our confidence. Learning from the practices and experiences of these enterprises means the need to learn from their spirit of advancing despite difficulties and bravely engaging in reform, learn from their courage of striding toward the market, and learn from their attitude of exercising meticulous management, we should make bold innovation, engage in active exploration and, proceeding from the reality of the enterprise concerned, open up a new road for SOE development.

To achieve the goal for lifting SOEs out of difficulties, we must be sure of victory in the decisive battle, however, due to unbalanced development and the vast differences between the eastern, central and western regions, we cannot follow one and the same standard for extricating SOEs from difficulties, but rather the standards used must be somewhat different. When we say bringing about a turn from deficit to profit for the concerned trade as a whole, we don't mean all enterprises within the trade should reverse the situation of loss, because it is normal that some enterprises enjoy profits while some others suffer losses. We should fully understand the protractedness and arduousness of SOE reform and this understanding should be kept in conformity with the spirit of the Fourth Plenary Session of the 15th CPC Central Committee, integrate the extrication from difficulties in three years with 10 years of development. The three-year goal is a phased task for laying a foundation, greater attention should be paid to 10-year development. A speed without efficiency is no good, the type of "extrication from difficulties" characterized by "getting out of difficulties" this year but suffering losses again next year is no good either.

At present, there is basically a complete set of State policies and measures for SOE reform and development, the crucial thing now is to step up work, perform responsibility, and tackle major and difficult problems. In the year of decisive battle and centered around the three-year goal of carrying out SOE reform and getting them out of difficulties, efforts should be focused on doing a good job in controlling aggregate and relieving the pressure brought about by a glut of products; actively explore domestic and international markets; readjust and optimize the asset-liability structure and reduce enterprise debt burdens; properly apply the State policy for supporting major technical renovation, and enhance enterprises' technical innovative ability; strengthen and improve enterprise management and improve the overall qualities of enterprises. We should concert our efforts and work with one heart and one mind, then we will certainly be able to win victory in the decisive battle.