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China to Shut Down Money-Losing Enterprises
China will focus its efforts to close down loss-making enterprises on six industries this year -- iron and steel, sugar, coal, non-ferrous metals, armaments, and textiles.
This will help eliminate the money-losing sources of these industries, according to officials from the State Economic and Trade Commission.
As a general rule, the money-losing enterprises will not be annexed, annexation will be used only for a small number of businesses, and the process will be very strict. The People's Bank of China, the country's central bank, will kick off pilot efforts on debt management in some selected enterprises.
Out-moded equipment should be demolished, rather than leased, sold, or used in other places, the officials noted.
Local governments should help resettle employees from closed enterprises, they said, adding that the enterprises should be shut down in accordance with law in order to ensure social stability.
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