Premier Zhu Rongji appealed to cadres yesterday to be of 'one mind' with him in pushing ahead with reforms of state-owned enterprises (SOEs). 'As long as we work with one mind, we can surely make headway in state enterprise reform,' he said insisting what the central Government had prescribed was 'correct and effective'. In a meeting with National People's Congress deputies from the hard-hit northeast province of Jilin, Mr Zhu reassured them unprofitable state firms were not doomed. 'Achieving the goal of turning around money-losing big and medium-sized state enterprises is an arduous task, but we have confidence in the success of the turning-around programme and we have the means and methods,' Mr Zhu was quoted by Xinhua as saying. As long as cadres had confidence and with the right 'favourable factors', debt-ridden state enterprises could be saved, he said. The Premier called on the cadres to do what he set down in his Government Work Report on Friday: to stop overlapping investment, provide and create jobs for laid-off workers, separate government administration from commercial operations and improve management. Repeating a football analogy, Mr Zhu issued a stern warning on Friday to enterprise managers, saying those who failed to produce results in one year would be shown the 'yellow card' and fired if they could not turn losses into profits after two years in the job. In a meeting with deputies from Shaanxi province yesterday, Vice-Premier Wu Bangguo said 1999 would be a critical year for SOE reform. 'At the moment, we must stop the problem of over-capacity in inferior industries and establish a competitive mechanism to create a suitable environment and market conditions for business,' Mr Wu said. Last week, Minister of State Economic and Trade Commission Sheng Huaren said a new calculation had cut the number of large and medium-sized SOEs to 7,680, of which only 30 per cent were losing money. The figures were lower than previous counts by the Government, which said more than 40 per cent were losing money. Some foreign economists estimated more than 60 per cent were in the red. Deputies attending the NPC meeting have found faults with the Premier, saying there was little progress in SOE reform. Although listed by Mr Zhu as one of the five top priority tasks, reform was stalled as China struggled to overcome fallout from the export slump caused by the Asian financial crisis.
