State reform to take four years

PUBLISHED : Friday, 23 January, 1998, 12:00am
UPDATED : Friday, 23 January, 1998, 12:00am

Beijing has backed off from its stated target of turning around the state sector within three years.

The Economic Information Daily said the programme would take four years, including last year, and the target now meant bringing the proportion of loss-making enterprises down to 20 per cent.

About 5,000 of the top 15,700 state-owned enterprises make losses.

The report said the goal was to reduce loss-making enterprises to an acceptable level of about 20 per cent.

The definition of restoring an enterprise to profitability has also been softened to mean substantially reducing its losses.

For instance, if an enterprise was losing 200 million yuan (about HK$186 million) a year, reducing this to 50 million yuan would constitute a turning around of the company's fortunes, the paper said.

It did, however, admit that a few officials had no faith in the three-year target but tried to boost morale by highlighting the successes seen last year.

In the first nine months of last year, 389 state firms went bankrupt, 623 were taken over and 515 shed staff and increased their efficiency.

Overall, 1,350 were reformed.

Last year, 30 billion yuan in bad loans were written off, with this year's target at 40 billion yuan, it said.

About 1,500 state firms could be turned around a year, reforming 6,000 by the end of the programme, the paper said.

It stressed that the three-year target depended on a rapidly improving textiles industry, industry reorganisation and social stability.