A senior Chinese official said here Wednesday that China will take five measures to promote the restructuring and reorganization of the country's state-owned enterprises (SOEs).

 

Li Rongrong, minister in charge of the State-owned Assets Supervision and Administration Commission (SASAC) of China's State Council, made the remark at an international merger and acquisition summit, which opened in Beijing Wednesday.

 

Li said China welcomes more foreign and domestic private capital to participate in China's SOE reform, as China's market economy advances, reform and opening expand, legal systems and capital market improve.

 

According to Li, the first of the five measures is to encourage more SOEs to list in the domestic market by introducing domestic and foreign investment.

 

The second is to give full play to the role of China's large SOEs in the process of merger and acquisition, striving to cultivate and develop some enterprise groups with international competitiveness, Li said.

 

Thirdly, more SOEs who lose to the competition on the market will have to leave the stage. China will speed up the process by establishing a quitting mechanism and a system of elimination through selection or contest especially for the SOEs.

 

China will continue to encourage more SOEs to invest abroad, set up branch factories in other countries and participate in international merger and acquisition. To that end, China will further improve consultation service, legal protection and the international adjustment system for overseas investment, said Li, when listing the fourth measure.

 

Li said the last measure is to create opportunities for foreign enterprises to participate in the merger and acquisition of China's SOEs, by improving relevant merger and acquisition laws and establishing a modern property rights system and market.

 

Li said great achievements have been made in the process of adjusting the layout and structure of China's state economy, an important part of China's economic reform started in the late 1970s.

 

According to Li, at present, a group of large enterprises have emerged in China, and by 2002, 11 Chinese SOEs have entered the global top 500 list.

 

China's SOE reform has also made progress, said Li. By 2002, more than half of China's 159,000 SOEs had launched their enterprise reform, with some enterprises suffering long-term losses and in heavy debt and some exhausted mining sites having all quit the market.

 

About 85 percent of China's small SOEs have realized multi-level property rights through reforms, said Li.

 

He added that though nearly half of China's SOEs have been closed, the total profits they made had increased from the 83.8 billion yuan (10.1 billion US dollars) in 1995 to 220.9 billion yuan (26.7 billion US dollars) in 2002.

 

Li said China is facing many favorable conditions for the adjustment of the layout and structure of the state economy, like the establishment of the SASAC, the increasing proportion of the non-public economy, and the abundant capital for merger and acquisition from global investors.

 

But he also mentioned some irrational problems existing in the economic reform process, such as the still high proportion of processing industry and common service industry in the state-owned economy, the small scale of China's SOEs and the bankrupt SOEs that have not yet closed.

 

(Xinhua News Agency November 20, 2003)