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Larger Firms Founded in Guangzhou
The four newly established industrial and trade groups in Guangzhou will help this capital of South China's Guangdong Province improve its competitiveness in the world market, said a senior municipal government official on Tuesday.
Guangzhou Mayor Lin Shusen told an economic conference that his city needs to establish more large scale industrial and trade firms to join the world economic development while trying to attract heavyweight overseas companies to support its economic growth.
With China's pending entry into the World Trade Organization (WTO), Guangzhou companies have been required to expand their presence in world markets to compete with foreign industries, Lin said.
The four firms established by the end of June carry the city's hopes for post-WTO accession, Lin said.
The heavyweight firms include Guangzhou Automobile Group Co Ltd, Guangzhou Steel Groups Co Ltd, Guangzhou Electronics and Machinery Group Co Ltd and Guangzhou Light Industrial and Trade Group Co Ltd.
These corporations consist of 458 smaller, specialized companies and had a total fixed investment of 66 billion yuan (US$7.9 billion).
They are expected to play a large part in Guangzhou's economic growth in future years.
Guangzhou already has plenty of small and medium-sized enterprises which have taken a role in world economic competition.
But larger firms need to be established to meet the increasingly fierce international competition, Lin added.
To fortify the large-scale groups, the municipal government plans to invest more than 1 billion yuan (US$120 million) to help bail out its State-owned enterprises (SOEs) and upgrade its industrial structure this year.
Guangzhou's pillar sectors of high-tech, steel, light industry, new materials and automobiles will be given top priority in developing future large scale industrial and trade groups, Lin said.
Some processing firms and small companies will be merged, re-established, or their stocks will be sold or auctioned off to help set up larger companies, Lin added.
A total of 120 small and medium-sized SOEs operating in the red will be declared bankrupt, be auctioned off or merged with profit making companies later this year.
Another 122 SOEs will be slated to turn a profit by 2001, Lin said.
Guangzhou will have more than 10 industrial and trade groups with an annual industrial production or foreign trade volume of more than 5 billion yuan (US$600 million) within 10 years.
Guangzhou, capital of Guangdong Province, reached an industrial output value of 119.2 billion yuan (US$14.4 billion) in the first five months this year, up 16.1 per cent from the same period of the previous year, and accounting for about 40 per cent of the province's total.
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