State sector to stay public
BEIJING has revived the old inter-departmental 'joint conference' system to ensure that reform of state enterprises will not lead to privatisation.
The pro-Chinese Hong Kong daily, Wen Wei Po, reported yesterday that the State Council had approved 'a joint conference system' to oversee the modernisation of the state sector.
The paper reported that the conference would consist of leading cadres from 15 ministries and commissions.
They included the State Planning Commission, the Commission for Restructuring the Economy, the Finance Ministry and the People's Bank of China.
The minister and first vice-minister of the State Economic and Trade Commission (SETC), Wang Zhongyu and Chen Qingtai, will be put in charge of the joint conference.
Wen Wei Po reported that the State Council leadership wanted to dispel the 'simplistic understanding' that the modernisation of state enterprises merely meant turning them into listed shareholding companies or the raising of capital among workers to form new companies'.
The paper hinted that the formation of modern enterprises did not necessarily mean privatisation or the adoption of Western-style management.
It quoted a State Council leader as saying a modern enterprise system consisted of defining companies as legal entities; a 'responsibility system' for managers and a scientific leadership structure.
Economists in Beijing said the creation of a joint conference to oversee the direction of enterprise reform dovetailed with remarks by leaders, including Vice-Premier Zhu Rongji, that reform should not weaken the position of state enterprises as the 'mainstay of the economy'.
They said the joint conference system was a throwback to the old policy of relatively tight control of the economy through executive orders.
Earlier this year, the State Council set up a 'Conference on the Comprehensive Co-ordination and Adjustment of Economic Operations' to ensure the success of the campaign to boost 'macro-level adjustments and controls'.
However, the activities of the conference, which consists of senior officials from 10 ministries, have not been regularly reported in the official media.
The SETC, which was formed last year and partially modelled on Japan's Ministry of International Trade and Industry, is considered a Zhu power base. Both Mr Wang and Mr Chen are proteges of Mr Zhu.
Analysts said recent pronouncements by Mr Zhu and other ministers showed that reform of enterprises next year would consist mainly of 'micro-level reforms' such as promoting the efficiency of managers and workers.
They said Beijing would steer clear of radical measures such as the large-scale conversion of state companies into shareholding units.