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Zhu Rongji
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Pressure mounts for competitive leaders

Zhu Rongji

Beijing is expected to place a great deal of resources on reforming state-owned enterprises (SOEs) over the next five years, according to a mainland expert of the Economist Group.

The aim is to enhance their capabilities to compete with foreign corporate giants after the mainland joins the World Trade Organisation, expected by the end of this year or early next year.

The self-strengthening process will be facilitated through mergers and acquisitions.

Lois Dougan Tretiak, chief representative of the company's Beijing and Shanghai offices, said: 'Reforms are going to speed up.'

Ms Tretiak said Beijing was expected to spend massive capital resources to build up key SOEs in order to create competitively world-class giants to compete with foreign companies.

She said some companies had already expanded, citing as examples Haier, the mainland's biggest manufacturer of refrigerators and air-conditioners, computer-maker Legend Holdings and beer-producer Tsingtao Brewery. Ms Tretiak said Tsingtao Brewery was making a big push to boost its market share in major mainland cities, before expanding in overseas markets.

She expects to see more merger and acquisition activity between domestic companies in various industries such as the aviation and power sectors.

Strategic alliances with foreign companies would be seen as a way of creating economies of scale.

Ms Tretiak said the government, led by Premier Zhu Rongji and President Jiang Zemin, had been promoting a reformation of SOEs a few years ago, but this move was accelerating as the mainland prepares to enter the WTO.

Real competition would be seen in the mainland in the coming five years as Beijing opened its market after the WTO entry, she said.

Ms Tretiak was confident about the mainland's economic outlook, anticipating an average 8 per cent economic growth a year over the next five years.

Ms Tretiak said the mainland's exports to five countries - the United States, Hong Kong, Japan, Germany and South Korea - would remain crucial to the country's trade performance.

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