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China Invests More in Technical Upgrading
In the first two months of this year, China poured 17.6 billion yuan in technical upgrade of enterprises, up 22.6 percent over the same period last year, continuing the fast growth momentum last year.
In 2000, China registered an annual growth of 13.2 percent in this field, twice that of fixed assets investment growth, according to latest statistics, released from the State Economic and Trade Commission (SETC).
Influenced by Asian financial crisis, China suffered a downward trend in its growth of investment in technical upgrading in the 1998-1999 period, said Gan Zhihe, director in charge of investment and planning in the commission. He noted that the growth rate in this respect in 1999 even decreased to a negative figure.
In the second half of 1999, Chinese government decided to use part of the funds raised from treasury bonds to provide interest discounts for companies having technical upgrade projects. In the 1999-2000 period, the sum for this use totaled 19.5 billion yuan and helped more than 600 companies in six industrial sectors improve their technical level.
These funds brought in a total investment 240 billion yuan in technical upgrading, according to Gan.
Technological upgrades, together with debt-equity swaps and bankruptcy, was considered to be the most effective measure in reform of State-owned enterprises (SOEs).
To pull SOEs out of difficulty, China launched a group of technical upgrade projects in key companies in the past two years, such as polyethylene projects in Yanshan Oil Chem Group and rolling mill project in Anshan Steel Group.
Gan said that these projects have helped revitalize or improve the competitive edge of these companies.
Gan also noted that the government is now adopting measures to reform their investment mechanism and will gradually loose administerial approval procedure for companies to make policy decisions.
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