Hu Zhongping, assistant director of the Ministry of Construction's international relations department, said yesterday: 'Not one state-owned construction firm has been successfully transformed into a limited company or a shareholding firm since the Ministry of Construction pursued the policy posed by the central government.' She was speaking after a seminar in Hong Kong, organised by Adsale Exhibition Services, on the development of the building and construction industries in China.

Ms Hu said the state-owned companies were facing difficulties during the transformation and were delaying the process.

'For example, many people will be fired after the restructuring,' she said.

'We should find the solutions before the firms are converted into shareholding companies.' At the end of 1993, China's construction industry comprised more than 94,000 enterprises with 30.5 million people engaged in the industry. It constituted 5.06 per cent of the number of people employed with more than 4.5 million engineering and technical personnel.

More problems would have to be solved before the transformation could proceed smoothly, said Ms Hu.

She said a comprehensive bankruptcy law was required because some firms would go bankrupt in the process.

However, the vice-director of the Ministry of Construction's construction industry department, Wu Zhinai said at the seminar the restructuring had been set by the central government as the main target for the industry until the next century.

The industry was required to transform the state-owned construction enterprises into corporations, and gradually change the existing companies, which were fully operated by the state, into limited companies or companies with shareholders, said Mr Wu.

The move will push the construction industry into the market and promote its development, through competition, ensuring the survival of the strongest.