Widespread lay-offs are the only way to continue reforming the ailing state sector but mass unemployment can be averted, the heads of the commission said.
In the first 10 months of the year, profits of large- and medium-size state companies plummeted 60 per cent, compared to the same period in 1997, to 23.5 billion yuan (HK$21.85 billion), said Mr Sheng.
He blamed the Asian financial crisis, the summer floods, poor products and management, an excess supply of most goods and heavy debts.
Mr Sheng also said staff levels were up to 10 times higher than those of foreign firms making the same products.
However, Zheng Silin, vice-chairman of the commission, insisted the number of laid-off workers would gradually fall over the next two years as they found new jobs.
From January to October, China's textile industry destroyed 4.8 million spindles and laid off 450,000 workers, cutting losses by 1.38 billion yuan, said Mr Sheng. Next year's target was to destroy another 5.2 million spindles, lay off 750,000 workers and cut losses by 4.62 billion yuan, as well as close 25,800 coal mines and cut output by 250 million tonnes, or 18 per cent of 1997 production.
