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CHINA'S ailing state enterprises have suffered losses of at least 130 billion yuan (HK$115.44 billion) and the multiple debts among them stood at 140 billion yuan, according to official statistics.

  The plight of the 14,000-strong state-owned medium and large enterprises was addressed in a report compiled by the State Economic and Trade Commission (SETC).

  Giving an account of the chronic problems facing state firms, the report said many of these enterprises encountered grave operational difficulties.

  ''They are faced with [the threat of] closure, half-closure or even bankruptcy. Many enterprises have had difficulty in paying wages to their workers,'' the SETC report said.

  The SETC said the problem of so-called triangular debts had worsened.

   Based on a survey among coal, electricity and metallurgical industries conducted recently, the report said the total size of triangular debts had reached 140 billion yuan.

  The shortage of funds for fixed-asset investments was also responsible for the increase in debts, it said.

    In the face of the re-emergence of the triangular debt problem, senior Chinese officials at the NPC have indicated that another concentrated drive to clear the debts would be launched in some badly-hit regions.

  Based on a joint survey conducted by several ministries in 16 major cities, the SETC reported that state enterprises were also faced with a huge external debt burden.

   The enterprises surveyed had a total of 319.5 billion yuan of debts - excluding the debts they owed each other - while their total assets stood at 447.1 billion yuan.

  The same survey found that the state enterprises in the 16 cities had to shoulder the financial burden of giving pensions to 3.07 million retired workers, who represented 36.7 per cent of their payroll.

  The SETC report admitted that the burden of community services, low floating capital and out-dated production structures had added to the plight of the enterprises.

  The SETC report said the central Government would take steps to close loopholes through which state assets could be lost during the transitional period of enterprise reform.

    Mapping out the strategy to revamp the state sector this year, the report said the central Government would organise relevant departments to solve the problem of multiple debts.

  The problems of the past - unreasonable debts and the shortage of funds for retired workers - would be solved so that enterprises could compete in a market economy, the report said.

    It said the SETC would launch a joint inspection with the Finance Ministry to asses the assets of 10,000 medium and large enterprises later this year.

  Emphasising that state firms had contributed 67 per cent of the total business tax in the country, the report said their standing as the backbone of the national economy must be upheld.

    This would guarantee the stability and development of the national economy, the report said.



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National Development and Reform Commission

State enterprise losses run to 130 billion yuan