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Most Enterprises in Sichuan Separate from Government Departments
The Sichuan provincial government recently decided to separate 268 of its 272 state enterprises from related government departments.
The move means that government officials will not give administrative orders over the management and operation of these enterprises, which have a combined capital of 68.2 billion yuan (US$8.2 billion), or 98.2 percent of the total of the state enterprises in Sichuan Province.
Zhang Zhongwei, governor of Sichuan, southwest China, stressed that it is necessary to separate the functions of government from those of enterprises so that independent economic entities have full authority for their own management.
Sichuan is the leading economic powerhouse among the 12 provinces, municipalities and autonomous regions in western China.
The province has a large group of state enterprises that were set up in the 1960s and 1970s. However, many are in the red, because of rigid management mechanisms.
The 272 state enterprises in Sichuan now have a total capital of 69.5 billion yuan and over 170,000 employees.
According to a plan, the province will carry out the separation of the state enterprises from government departments by setting up new group companies or by reforming, merging, announcing bankruptcy and selling of these enterprises.
Non-government enterprises applauded this move, saying it will offer equal chances for them to compete with state enterprises.
Formerly, state enterprises enjoyed priorities in terms of obtaining investment, land use, accession into the market and institutional purchasing.
To promote the development of a market economy, the Chinese government has required that military units, courts, procuratorates and government departments should not run enterprises and urged them to separate from the enterprises run by them.
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