Li Rongrong, minister of the State Economic and Trade Commission, announced the news at a press conference Friday during the ongoing annual session of the National People's Congress.

Continued efforts will be made to loosen control over and invigorate small and medium-sized State-owned enterprises, he said, adding that the Law on the Small and Medium-sized Enterprise Promotion will soon be enacted.

The country will also open wider to the outside world, and make much effort to meet the requirements brought by its entry into the World Trade Organization (WTO), added Li.

In 2001, China's State-owned and controlled businesses turned over 233 billion yuan (US$28 billion) in profits, shrinking by 6.2 billion yuan (US$749 million) or 1.4 per cent compared with 2000, according to the latest statistics of the commission.

But Li said the numbers were "very satisfactory," given the fact that the global economy has been in doldrums over the past year, and that the profit drop was partly attributed to businesses' increased spending on compensation for job cuts and improving workplace safety in coal mines.

"We envision that 2002 profits may be slightly lower than last year's," Li said.

"But we will create a better environment to help enterprises earn more."

One of the most arduous problems facing transition from a planned economy to a market one is how to end moribund enterprises, he said.

Last year, the government closed 460 State-owned enterprises, leaving 700,000 workers unemployed, and wrote off 51.5 billion yuan (US$6.2 billion) in bad loans, he said.

Thanks to concerted efforts by enterprises and governments, people have begun to accept the concept that insolvent firms with little hope of recovery should be shut down, he said.

In addition to allocating more funds to bring more workers back to work force, the government this year will help create up to 8 million job opportunities, and vigorously support the development of smaller firms, so that they can absorb more workers, Li said.

But the government will also redouble its efforts to shut down small businesses like small paper mills and coal mines, which waste resources, cause pollution, and fail to meet safe production conditions, he said.

The minister also reiterated that "China will work out detailed measures to meet WTO requirements and speed up the establishment of an import and export administrative system that conforms with international norms."

(China Daily March 10, 2002)