Making Persistent Explorations, Conducting Incessant Standardization

A decisive battle has been going on this year to achieve the goal of reforming State-owned enterprises and getting them out of difficulties. Judging from the present situation, victory is in sight, our objective is expected to be fulfilled as scheduled.

At the advent of the new century and at the time when the 10th Five-year Plan will be put into practice, conscientiously summing up the successful experiences gained in the reform and development of State-owned enterprises (SOEs) in the past three years is of important significance to the realization of long-term, stable SOE development.

In setting the goal of reforming SOEs and relieving them of difficulties in three years, the Party Central Committee held up a banner and issued a great call. With this banner, people at the upper and lower levels nationwide and the strength of all quarters were mobilized and brought into play, they made comprehensive use of various policy-related means and concentrated energy to fight a decisive battle for the reform of State-owned enterprises.

Over the past three years, the various regions, departments and enterprises in general have been conscientiously carrying out the series of principles, policies and measures of the Party Central Committee and the State Council concerning SOE reform and development, they have found out successful ways in practice and accumulated many useful experiences. An important one of which is unswervingly persisting in deepening the reform, and establishing and perfecting a modern enterprise system.

Acting in compliance with the requirements of distinct property rights, clearly-defined rights and duties, separation of government administration from enterprise management, and scientific management, China has made major progress in the establishment of a modern enterprise system for State-owned firms over the past three years, and has initially set up the basic framework of the modern enterprise system.

A batch of State-owned enterprises under central and local management have conducted normal system reform and have gradually realized the diversity of investment mainstays of State-owned enterprises; the government has changed its functions, government administration and enterprise management have been further separated, a new State-owned asset management system has begun to be established; many enterprises have actively transformed their internal operational mechanisms, and intensified the reform of labor, personnel and distribution systems.

They have achieved notable progress in separating enterprises from social functions, establishing a mechanism for promoting the superior enterprises and eliminating the inferior ones and pushing forward the construction of a social security system.

Beginning from November 15, our newspaper will publish a series of reports on the experiences of the five enterprises-Qingdao Port Office, the Anhui Huamao Group Co. Ltd., Chunlan Group, Shandong Cement Plant, and the Lanxin Communication Equipment Group. These five enterprises have made remarkable achievements in reform and development, their many methods, such as standard system reform and intensified management, are worth taking for reference and learning from by State-owned enterprises at large.

We have every reason to be fully confident of success in the reform and development of State-owned enterprises, at the same time we should be clearly aware that the tasks of reform are very arduous and heavy.

The objective of reforming and shaking State-owned enterprises off difficulties in three years is a phased goal. The reform of State-owned enterprises aims to establish a new management system and operational mechanism suited to the requirements of the socialist market economic structure, the establishment, perfection and effective operation of a new system need a process.

The predicament facing loss-making large and medium-sized State-owned enterprises is caused by many factors, the thorough settlements of questions, be they concerning system, or structure and social burden, also needs a relatively long process.

With regard to the establishment of a modern enterprise system, what we have currently formed is only the framework of a new system, although a large batch of State-owned enterprises have conducted reform in line with a corporate system, quite a few enterprises, however, are not standard enough in many aspects, for instance, the company's legal person management structure is imperfect, fund- contributors have not put their money fully in place, the operational mechanism has not been completely transformed and management is lacking behind, all these have to be further standardized and systematized.

Some major issues, such as the need to speed up the pace of diversifying stock rights, establishing a legal person management structure featuring legal standardization and strict supervision and control, continuing to promote the reform of the State-owned assets management system and SOE managers management system and setting up an effective incentive and restrictive mechanism, require that we strive to explore ways for their solutions in our future work.

Lately, the General Office of the State Council has transmitted the document, "the Basic Norms Governing the Establishment of a Modern Enterprise System and Intensified Management in State-Owned Enterprises. This is a guidance document on Expediting the Establishment of a Modern Enterprise System in State-owned enterprises, which we must assiduously study and conscientiously implement.

The 10th Five-year Plan will soon be launched, and the reform of State-owned enterprises will enter a new stage. The Proposals adopted by the Fifth Plenary Session of the 11th Central Committee of the Communist Party of China has further clearly defined the principles for the reform and development of State-owned enterprises during the 10th Five-year Plan period.

We are convinced that with a sound foundation laid for the reform and difficulty-relief of State-owned enterprises in three years and with the rich experiences gained in the reform and development of the numerous State-owned enterprises, the pace of the reform and development of State-owned enterprises will definitely become faster and the situation more favorable.



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