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Making Redoubled Efforts to Seize Victory in Decisive Battle for SOEs
2000 is the last year for realizing the goal set by the Party Central Committee for the reform of State-owned enterprises (SOEs) and lifting them out of difficulties in three years.
In the first half of this year, important progress was made in achieving said goal, reform was being constantly deepened, an all-time high was achieved in economic efficiency, and the situation was encouraging. This advancement has not only reinforced our confidence in realizing the said goal, but has also created favorable conditions for winning victory in the decisive battle this year.
The desirable achievements gained in the reform and development of SOEs and the maintenance of favorable situation are the result of the series of policy measures adopted by the Party Central Committee and the State Council for promoting economic growth and invigorating SOEs and the result of the central authorities' decisions carried out conscientiously by various departments, trades and regions.
These successes are really hard won. The series of macro supporting measures adopted by the central authorities in recent years have created favorable conditions for reforming SOEs and shaking them off difficulties. The series of measures implemented by the States, such as the pro-active financial policy, the policy for expanding domestic demands, the crackdown on smuggling, export-tax rebates, and lowering of bank interest rates on savings deposits and loans, have brought marked improvement in the environment for enterprise operation; the intensified effort made in eliminating backward production capacity and readjusting the economic structure has relaxed the contradiction resulting from the serious oversupply of some products and has broadened the space for enterprise development; particularly the intensified effort of the State to merge or let losing enterprises go bankrupt, and its adoption of new major policy measures such as debt-to-equity transfer and the offer of lower interest rate on technical renovation-these have directly stimulated a group of key State-owned enterprises to reverse or reduce deficits.
The dramatic rise in SOE economic benefits is also the result of the deep-going reform and strengthened management of the numerous enterprises.
The vast number of cadres and workers of the enterprise which is the main body of the reform and elimination of difficulties, in the face of the market witnessing cut-throat competition, have done their best to transform the operational mechanism, lay down and re-divert redundant workers and reduce the size of staff and increase economic efficiency, exerting painstaking efforts for lifting enterprises out of difficulties as soon as possible.
The five enterprises, namely, the Shanghai Baoshan Iron and Steel Group, the Northeast Pharmaceutical Group, the Hubei Qingjiang Hydroelectric Power Development Company, the Anyang Color Glass Picture-Tube Company and the Haixin Group, which are recommended to be publicized this time by the State Economic and Trade Commission and the Publicity Department of the CPC Central Committee, are the outstanding representatives of State-owned enterprises. Their experiences are worth learning from and drawing on by the vast number of State-owned enterprises in light of their realities in the course of deepening reform and strengthening management.
In the face of the favorable economic situation, we still have to notice that the foundation of some enterprises already rid of difficulties is not solid enough and the profit-making level of most enterprises is still not high.
A group of enterprises may possibly return to the loss-making state once changes occur in the external environment due to their lack of a solid management base and insufficiency of reserve strength for production capacity and development of products.
We should all the more notice that achieving the goal of reforming State-owned enterprises and getting them out of difficulties in three years is only completing a phased task, an overall improvement of SOEs still faces many problems and contradictions. For example, the creative capability, competitive capacity and risk-resistant ability of many SOEs are still rather weak, there is still no mechanism guarantee and technology guarantee for enterprises to really head toward a virtuous cycle. In the future, the space given by State policy measures for enterprises to increase profits will decrease. The irrationality of the domestic economic structure and the insufficiency of effective demands at home have a great influence on the improvement of enterprise efficiency, it needs a process to solve these problems.
The worldwide economic structural readjustment and quickening scientific and technological progress, particularly along with China's forthcoming accession to the World Trade Organization (WTO), the international competition confronting enterprises will become more intense. All these require that in the face of the already gained achievements, we should make redoubled efforts and must not be blindly optimistic and take things lightly.
We should continue to exert painstaking efforts to maintain the favorable situation for the development of SOE reform. We should act in accordance with the central authorities' strategic plan to do our work well in a down-to-earth manner in the aspects such as further promoting the reform of the standard corporation system, boosting the diversification of the enterprise investment mainstay, deepening the reform of the enterprise's labor, personnel and distribution systems, exploring effective methods for the management of State-owned assets, speeding up economic structural readjustment, carrying out the strategic reorganization of enterprises, earnestly reducing enterprises' debt burden, accelerating enterprise technological progress and constantly raising the management level of enterprises.
We believe that the goal of reforming State-owned enterprises and getting them out of difficulties in three years can definitely be achieved on schedule in the year of decisive battle.
(The author is a commentator of People's Daily)
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