Britain Participates in Chinese State-owned Firm Reform

Sino-UK "State-Owned Enterprise Reform and Development Project" Launched

The United Kingdom will provide technical assistance and 19 million pounds (US$28.3 million) to help China reform its State-owned firms and develop small, private enterprises.

"The project is the British Government's largest technical assistance programme in China and is the major project within the UK's Department for International Develop-ment's overall economic reform programme in China," said H E Sir Anthony Galsworthy, British Ambassador to China, who made the remarks yesterday at the launching ceremony of the "State-Owned Enterprise Reform and Enterprise Development Project" (SOERED) in Liaoning Province.

The project is co-administrated by the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) and the UK Department for International Development (DFID).

It is designed to support the reform policies of the Chinese Government by providing tools for their effective implementation and will be carried out in Northeast China's Liaoning Province and Southwest China's Sichuan Province over the next three years.

The focus of the project is on the restructuring of SOEs into self-sustaining businesses and support for the development of small, private firms.

The project will also set up supporting institutions including restructuring agencies, business advisory centres and credit guarantee funds for the development of small and medium enterprises (SMEs).

SOERED is expected to create sustainable models for restructuring enterprises and institutions supporting enterprise development both within the provinces and nationwide.

According to the project, China will match at least 30 per cent of UK contributions to the Credit Guarantee Funds.

Statistics indicate that more than 300,000 SOEs in China are undergoing reforms, which have a dramatic effect on provincial economies as well as the economic structure of China.

"The help from Britain will be especially valuable for SOEs to extricate themselves from difficult positions," said Gao Guozhu, vice-governor of Liaoning Province in charge of foreign economic trade.

Liaoning, the flagship province of China's planned economy developed in the 1950s, has about one-tenth of China's SOEs and used to be the country's heavy industry centre.

However, Liaoning has trailed many coastal regions since 1978 when China began developing a market economy. Many SOEs are severely afflicted by debts and many workers have been laid-off.