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China's Township Enterprises Face Changes
Chinese township enterprises are changing their growth pattern from output-oriented to efficiency-oriented after five years' stable growth, according to the Ministry of Agriculture.

A group of township enterprises have grown into large companies with high-tech background and improved competitiveness, but at one time they were considered small and inefficient, said Liu Zengsheng, director of the Bureau of Township Enterprises under the ministry.

Township enterprises each with more than 10 million yuan in sales income totaled 50,000 by 1999, and about 40 percent of the added value produced by township enterprises was attributed to those with an annual sales volume of 5 million yuan.

Liu noted that the increasing investment in technological innovation helped improve their competitiveness. Some 1,000 township companies invested more than 4 percent of their sales income in research and development according to the government's survey on 4,523 township enterprises.

In the past five years, around 80 percent of China's township enterprises have experienced internal restructuring, he added.

Half of the total capital of township companies, which used to be owned by the public, comes from non-public investors. About 60 percent of the added value of township enterprises was produced by individuals and private companies.

More and more township enterprises were shifted to joint stock companies and nearly 50 township enterprises have been listed so far.

Loans from banks only account for 20 percent of the total investment of township companies in 1999, down from 40 percent in 1992, while funds financed through other channels are equal to 50 percent, up from 30 percent.

Liu also pointed out that many township enterprises provide products for the overseas market and they have more access to funds, advanced technologies and ideas, which improves their overall quality.

Around 130,000 export oriented township companies in China produced 40 percent of the country's total export delivery volume last year and 10 percent of the sales income of township enterprises came from the exports.

(Xinhua 02/02/2001)


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