Zhu Rongji

Vice-Premier hopes for modern enterprise base within three years

PUBLISHED : Thursday, 31 July, 1997, 12:00am
UPDATED : Thursday, 31 July, 1997, 12:00am

Vice-Premier Zhu Rongji is confident a modern enterprise system can be established in about three years.

Mr Zhu, widely tipped to succeed Li Peng as the next prime minister, also suggested publicly-listed companies could take over loss-making state enterprises in the hope of turning them around.

He made the remarks during an inspection tour of Liaoning province, home to thousands of state-owned enterprises.

The week-long tour coincided with the beginning of the annual leadership forums in the resort of Beidaihe.

Mr Zhu visited key enterprises in Anshan, Fushun and Shenyang and held talks with factory managers, Xinhua (the New China News Agency) reported.

A significant industrial base, Liaoning has claimed success in reviving state industries.

This has been achieved through huge layoffs and by developing new industries.

Governor Wen Shizhen recently launched an appeal for bold experiments in rejuvenating the state sector.

In a meeting with local cadres, Mr Zhu said China could stop the haemorrhaging of state enterprises by promoting managers and using layoffs and mergers to achieve debt reduction through efficient financial management.

He underlined the contribution listed companies could make, and stressed they should be encouraged to take over and revive the fortunes of loss-making enterprises.

He said stock markets would soon become an important channel of capital for state enterprises on the mainland.

But while it was common for listed firms to seek profitable assets, taking over loss-making businesses could affect companies' results and weaken share performance.

However, Mr Zhu promised to make more cash available next year to cover bad debts borne by state enterprises.

This year, the central Government only set aside 30 billion yuan (HK$28 billion).

During his visit, Mr Zhu expressed concern over miners' poor housing conditions.

He ordered local governments to provide new homes in two years for 50,000 miners who are still living in run-down huts built by labourers working for the Japanese invasion army during World War II.