CHINA has mapped out a detailed plan to tighten control over the assets of 1,000 key state firms to avoid losses resulting from mismanagement, according to official reports. Head of the State Economic and Trade Commission (SETC) Wang Zhongyu said the central Government would instal, in phases, supervisory committees within the state enterprises to monitor their operation. The strategy, part of a revamp of the money-losing state sector, is endorsed in principle by the Communist Party at its watershed Central Committee plenum last year. Official statistics released, however, indicated a worsening of the operation of state firms with increasing losses and outflow of assets. According to mainland media yesterday, Mr Wang said the SETC had formulated, with other relevant departments, a detailed plan to reform the management and structure of state firms. The crux of the intensified reform is to ''adopt new perspectives and new thoughts'' in rejuvenating the ailing sector, he said. The official said enterprises which had suffered losses over a long period and whose assets could not cover debts would have to go bankrupt. Mainland sources said some state firms which were in the red had resisted orders for them to declare bankruptcy because of strong opposition from workers. They said reform over state enterprises had suffered a setback as Beijing leaders made concessions by slowing the pace of reform to quieten workers' unrest. Mr Wang said the assets of state firms should be utilised in the most efficient way. The SETC head said the two sets of regulations on the restructuring of management and supervision of enterprises should be fully implemented. Reforms of the employment, personnel and wage systems should be introduced in strict accordance with the relevant laws in order to set up a modern enterprise system, he said. According to the reform plan, Mr Wang said 10,000 medium and large-size state firms should fully implement the Enterprise Law and the detailed regulations on the transformation of management structure with-in two years. The task of clearing and auditing the total assets of state firms should be completed in the next two years. About the same time, 100 medium and large firms should have launched pilot schemes for the setting up of a modern enterprise system in order to explore ways for the corporatisation of state firms, he said. Mr Wang said about 10 cities would be chosen as testing-grounds for the introduction of a comprehensive reform package for boosting the overall strength of state firms. The senior official maintained that the sweeping reform had the ''enthusiastic support'' of regional governments and enterprises. He indicated that flexibility has been applied in the reform process, taking into account the specific problems of enterprises. For instance, different methods would be adopted in alleviating the unreasonable debt burden of enterprises.