China's township enterprises must undergo a new round of adjustment, according to an official with the Ministry of Agriculture.

Wang Baoping, head of the department of industrial policy guidance under the ministry, pointed out that the development speed of township enterprises has slowed down in recent years due to some internal problems and conflicts.

The official also praised the important role township enterprises have played in promoting the rapid development of China's national economy.

Wang said at the ongoing China (Beijing) International High-tech Industries Week 2000 that rural enterprises must adjust their industrial structures because they have many shortcomings, including irrational product mix, small scale of production, out-of-date technologies, and old-fashioned management ideas.

Experts have noted that the township enterprises scored rapid development in the early years because they enjoyed a series of advantages in terms of markets, policies, management mechanism, resources and labour force.

However, they said, the medium and low-grade products turned out by the rural enterprises have lost much of their original market in recent years due to the weakening of these advantages.

Township enterprises must adjust their industrial structure to find a way forward.

Wang said the Chinese Government expects to further increase the competitiveness of township enterprises in both the domestic and international markets through the adjustment of industrial structures.

China's rural enterprises entered a period of rapid development in the early 1980s, with businesses including agriculture, industry, and services.

Wang said a group of township enterprise-owned high-tech production bases is expected to be built in China's coastal provinces of Jiangsu, Zhejiang, Shandong and Guangdong and Shanghai Municipality. Township enterprises in western China are expected to build their own pillar industries based on their respective resource advantages.

According to the ministry's plan, township enterprise zones will be formed in the future, and in these zones township enterprises will have their own chains of co-ordination in production, supply and marketing.

Wang said these zones are expected to produce around 80 per cent of the business income of township enterprises by the year 2015. He said township enterprises will focus on the development of high-tech, high value-added, named brand and characteristic products in the coming years. Such products will account for 45 per cent by 2015, and the number of rural enterprises boasting an annual export value of more than US$1 million should reach 60,000.

Randall Worsley, a representative of the Pacific Venture Capital Company of the United States, said that many US investors are interested in China's small and medium-sized enterprises, and they appreciate their flexible management mechanisms.

Worsley, who is attending the ongoing high-tech week, also expressed his willingness to invest in China's township enterprises which are engaged in high-tech development and production, such as agricultural technology, software and e-information.

He expressed the hope that "China's township enterprises will become part of the world economy and an international economic force."

The township enterprises have become the principal players among China's small and medium-sized enterprises. In 1999, the industrial added value realized by township enterprises stood at 1.737 trillion yuan (US$209.2 billion), or 50 per cent of the country's total, and the export value totalled 774.4 billion yuan (US$93.3 billion), accounting for 40 per cent of the national total.

Township enterprises have also become a leading driving force behind China's rural economy. Statistics show that in 1999, China had 20.71 million township enterprises employing more than 120 million rural workers. These enterprises had a combined added value of over 2.48 trillion yuan (US$298.7 billion).

The Chinese Government has worked out a series of policies and regulations, including the Law on Township Enterprises issued in 1997, to encourage and support the development of rural enterprises. At the same time, concerned departments have launched special information networks and websites to serve the township enterprises in terms of policy, circulation, and e-commerce information.

Experts point out that China's township enterprises now face a good opportunity for development, citing rural and agricultural structural adjustment and the development of the country's western regions, the two key state strategies at present.

(Xinhua)