Liaoning's provincial government plans to cut 200,000 workers from non-production units in state-owned enterprises in the next three years. A total of 2 billion yuan (HK$1.86 billion) has been earmarked for the province's new phase of enterprise reforms. The provincial government yesterday unveiled a new package of measures to sustain development of large state firms. It is the first time the Government has presented a timetable ordering all state-owned enterprises to separate non-production units and welfare departments. 'All state-owned enterprises should absolutely separate their welfare branches from company operation within three years,' Xinhua (the New China News Agency) said. Re-employment centres would be set up to help laid-off workers and subsidies and social security payments provided, Xinhua said. Pilot cities for mass state enterprise reform would be increased from five to eight with Dandong, Jinzhao and Yingkao joining Dalian, Shenyang, Anshan, Fushun and Benxi. Statistics showed more than 420,000 workers in the latter five cities were either made redundant or settled elsewhere last year. Municipal governments in the province are now responsible for co-ordination of pension schemes. Officials said the rate of state enterprises taking part in the unemployment insurance plan was up to 96 per cent. Liaoning, saddled with outdated mines and factories, is one of the provinces suffering most from poorly functioning state enterprises. The new measures will introduce ways to inject funds into better-performing enterprises and reduce their debts. 'The provincial and municipal governments will exhaust all possibilities to attract foreign capital, bring in new technology and approve more state enterprises to be listed in order to find the necessary capital for the reform,' Xinhua said. In the first four months of the year, the Liaoning branch of the Industrial and Commercial Bank of China advanced additional loans worth 2.19 billion yuan to enterprises in the province. Privileged tax arrangements would be given to some potential enterprises to enable them to retain higher profits after tax, Xinhua said. Debt ratio of centrally owned state enterprises would be reduced by three to five per cent.