Firms get emergency aid pledge
EMERGENCY aid has been pledged for state enterprises and workers in Liaoning province, a bastion of Soviet-era factories and mines, by Vice-Premier Wu Bangguo.
Mr Wu, in charge of industry and enterprise reform, also urged cadres and managers in the province to concentrate on improving internal management and 'exhausting [their] inner potential' to meet the challenge of the marketplace.
Xinhua (the New China News Agency) last night quoted Mr Wu, who has been touring the provinces since April, as promising substantial government help to transform the old industrial base.
He inspected 20 major state enterprises in Liaoning on an eight-day trip that ended on Sunday.
'The state will provide the necessary support,' he said, adding that it was necessary to create a set of 'relatively generous and tolerant' external conditions for reforms.
Industrial analysts in the province said while more than 45 per cent of state-owned units nationwide were losing money, Liaoning's ratio was substantially higher.
It is understood that Mr Wu promised state credit to bail out factories and mines.
Earlier this year, Beijing channelled emergency loans to pay workers' salaries in such struggling units as the Angang Iron and Steel Works.
Mr Wu told managers to 'emancipate their minds and change their traditional ideas' in order to turn enterprises around.
However, the Vice-Premier steered clear of market-oriented solutions such as the transformation of state-owned enterprises into shareholding companies.
He dwelled mainly on traditional formulae such as 'upholding party leadership and developing the functions of party cells as the political core' of the concerns.
'To speed up the transformation of the old industrial base, it is necessary to strengthen the leadership and internal economic management while mobilising the enthusiasm of employees,' Xinhua quoted Mr Wu as saying.
The Vice-Premier, also a Politburo member, pledged the central Government's help in the creation of 'larger enterprise groups' or conglomerates.
Western economists have cast doubt on whether Beijing, which is still committed to a tight monetary policy, could afford an expensive salvage plan for Liaoning and several other provinces with similar problems.
They point to internal estimates that to modernise a huge enterprise such as Angang would take more than 50 billion yuan (HK$46.6 billion).
Meanwhile, Liaoning sources said that an estimated 50 per cent of the district and county administrations in the province had difficulty paying their civil servants on time.
They said in the past year, Liaoning cities such as the capital Shenyang had witnessed frequent demonstrations by workers and civil servants owed salaries.
