The central government is working on specific rules to increase supervision of State-owned assets held by Chinese enterprises operating overseas, a senior official said yesterday in Beijing.
Bosses of such enterprises will receive strict punishment for any practices that go against the rules and endanger their companies' assets, said Li Rongrong, minister of the State-owned Assets Supervision and Administration Commission, the organization that supervises State-owned enterprises (SOEs) on behalf of the Chinese Government.
Li made the remarks yesterday when talking about the supervision of State-owned assets and reform of SOEs to members of the Standing Committee of the National People's Congress (NPC).
All legislators are attending the four-day 15th session of the 10th NPC Standing Committee, which concludes today.
Li said the move follows the US$540 million loss by the China Aviation Oil (Singapore) Corp, after it became involved in speculative trading.
"The central government has urged all central SOEs to learn lessons from this case and take positive and effective measures to strengthen supervision," said Li.
The central government is now investigating how many enterprises are involved in high-risk business activities, such as derivatives trading, Li said.
1,800 businesses to go bankrupt
When turning to SOE reform, Li said that more than 1,800 large and medium-sized State-owned enterprises will face bankruptcy in the next four years.
These SOEs employ 2.8 million staff and suffered losses of 15 billion yuan (US$1.8 billion) in 2003 alone, Li added.
However, he said the overall performance of SOEs is improving: SOEs and companies in which the State is the majority shareholder made combined profits of 727.96 billion yuan (US$88.5 billion) last year, up 48 percent from 2003.
Fraudulence in statistics
Jiang Zhenghua, vice-chairman of the NPC Standing Committee, yesterday reported to lawmakers the results of an investigation into the implementation of the Statistics Law.
Lawmakers inspected the Inner Mongolia Autonomous Region, Liaoning and Zhejiang provinces and Chongqing Municipality at the end of last year, said Jiang, and found a slew of fraudulent activities in the collection and reporting of statistics.
Jiang urged statistics departments to find effective ways of guaranteeing the authenticity of figures they report, such as publishing figures on the Internet to allow wider public scrutiny.
(China Daily April 27, 2005)
