Guangzhou sets sweeping reforms

PUBLISHED : Saturday, 15 January, 2000, 12:00am
UPDATED : Saturday, 15 January, 2000, 12:00am

Guangzhou will close, merge and sell 77 small and medium-sized state-owned commercial enterprises this year.

Party secretary Huang Huahua announced on Thursday the city would encourage private investors to buy or merge state-sector commercial assets, the Guangzhou-based Information Times reported.

However, Mr Huang also indicated the city would continue to oversee key commercial enterprises producing and selling essential commodities.

Commercial restructuring is the latest move by the municipality to bring its moribund state sector into profitability.

Last week, Guangzhou Economic Commission chief Chen Guangsong said the city would seek this year to dramatically improve the performance of 757 state-owned and state-controlled industrial enterprises, more than half of which operate in the red.

Mr Chen said the city would cut the number of loss-making firms to 20 per cent of the total by merging, restructuring and closing 251 failing companies.

This year marked an important juncture for state enterprise reform, Mr Huang said.

Commercial enterprises were part of the wider economy, and the government would accelerate reform through cross-sector and trans-regional mergers and acquisitions, he said.

Guangzhou's state-owned commercial enterprises recorded sales of 50.3 billion yuan (about HK$46.9 billion) in 1998, accounting for 55.7 per cent of the city's state-enterprise revenue.

Mr Huang said the city would restructure better performing small and medium-sized enterprises by encouraging employees, as well as foreign investors, to acquire shareholdings.