China to Put More into Technological UpgradingChina is to increase funding for technological upgrading of key enterprises in major sectors by allowing interest discounts on loans and providing subsidies, sources with the State Economic and Trade Commission (SETC) disclosed April 10.Gan Zhihe, director of SETC's Investment sector, said that China earmarked nine billion yuan of the total 100-billion-yuan treasury bond for technological upgrading this year to encourage enterprise renovation and industry upgrading. Gan said the fund will be used in two ways: one is in the form of subsidies, which will be given to 520 key state enterprises, 120 major enterprise groups and companies with good social and economic returns; the other is interest discounts for enterprises with state-recognized key projects. "As usual, key industries, key enterprises and key products will be given priority when considering the sum of funding, but this year, a few companies in difficulties but with potential and good projects will also be considered and enterprises in western areas will enjoy some preferential policies," he said. Gan said the funding will be used mainly to help enterprises improve development capabilities, establish research and development centers and build energy conservation projects. The money going to new technological projects, which took the lion's share last year, will account for a smaller proportion this year, he said. A considerable sum will be given to support the completion of 647 technological projects launched last year, with the main purpose of triggering economic growth, Gan said. The SETC is working on new management measures to handle the huge amount of funding. "With the transformation of government functions, repetitive and redundant authorization processes should be omitted, and the management methods of fixed assets and technological funds will be improved," Gan pointed out. The commission has stressed that banks should be given more freedom in giving loans independently. "They can determine funding by assessing the enterprise's credibility and the project's risk," Gan noted. China started a massive state-owned enterprise technological upgrading program in a move to expand domestic demand and help the enterprises as a whole out of difficulties in the last three years. China issued an additional 60 billion yuan in state bonds in the latter half of 1999, nine billion of which was also earmarked for technological upgrading of state-owned enterprises. |
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