At the National Economic and Trade Work Conference held at the end of 1999, Sheng Huaren, minister in charge of the State Economic and Trade Commission, pointed out that in 2000 economic and trade departments nationwide should focus on the work of the reform and development of enterprises, give prominent place to structural readjustment, continue to make explorations and forge ahead to win the final victory of extricating State-owned enterprises (SOEs) out of difficulties in three years through reform.


Minister Sheng noted that 2000 is the last and also the decisive year for SOEs to attain the goal of getting rid of difficulties through reform in three years. Premier Zhu Rongji and Vice-Premier Wu Bangguo have set specific demands for enterprises to achieve the goal and do a good job in economic and trade work in 2000.


According to the minister, in 2000 efforts will be made to lift the majority of large and medium-sized SOEs out of difficulties, and ensure that most trades change from losses into profits or increase profits, and that most large and medium-sized backbone SOEs initially establish the modern enterprise system according to the set standards. The country's industrial added value and total volume of retail sales will continue to maintain fairly rapid growth. The profits netted by State-owned and State holding industrial enterprises will hit the top level in five years. Emphasis will be put on the following eight tasks:


First, continuing to effectively control overall supply and demand and basically keeping the balance between supply and demand. Priority will be given to the reduction of excessive output of coal, iron and steel and sugar refining industries, elimination of backward production capacity, and closing down or suspending the production of small coal mines, small oil refineries, small cement works, small glass works and small thermal power plants with poor economic returns, high energy consumption and serious pollution.


Second, energetically developing urban and rural markets and actively expanding export. The composition of export commodities will be further optimized, and export markets diversified. The market order will be rectified, and the mutual default of enterprises will be reduced. Efforts will be made to severely crack down on counterfeit and shoddy products, and reduce the burden of enterprises.


Third, readjusting and optimizing the assets liability structure and reducing the debt burden of enterprises in real earnest. Good work should be done in bankrupting and closing seriously loss-making enterprises, utilizing in a concentrated way the reserve funds for offsetting bank bad debts, and eliminating some sources of losses. The method of transferring debts into equity should be put into practice in accordance with set demands and standards, and supervision and management over the work will be intensified. Enterprises must strive to transform their operational mechanisms, and those practicing debt-equity transfer should change from losses into profit in 2000.


Fourth, expediting technological progress and increasing the technological innovative capacity of enterprises. Traditional industries will be renovated by new and high technologies, centering on product variety, quality, economic returns and the expansion of export. Focus will be put on launching a batch of symbol projects that represent the industrial level and can promote the upgrading of related industries. Strict responsibility system will be enforced in technological renovation projects enjoying deducted interest of bank loans. Set rules should be strictly followed and supervision intensified to prevent redundant construction. Construction of the technological innovation system centering on enterprises will be speeded up. All key State enterprises should set up technology development centers.


Fifth, energetically advancing the construction of a modern enterprise system and striving to establish market-oriented operational mechanisms in enterprises. The reform of key State enterprises should be accelerated, in an effort to let the majority of them initially establish a standard modern enterprise system. Energetic efforts will also be made to transform large and medium-sized SOEs into standard companies, and further deepen the internal reform of enterprises.


Sixth, Further strengthening enterprise management to enhance the overall quality of enterprises. Emphasis will be put on the management over cost, capital and quality. Concentrated training will be conducted among principal leaders of key State enterprises in batches, and the examination and supervision of enterprise managers will be intensified.


Seventh, reinforcing the efforts to relax the control over and support small enterprises, and promoting the reform and development of small and medium-sized enterprises (SMEs). Attention should be attached to the standard operation and practical results in the work to open and invigorate SMEs. Efforts should be made to combine control relaxing with assistance to encourage the development of SMEs, particularly technology-based SMEs. A socialized service system should be established and completed to provide diversified services for SMEs.


Eighth, promoting the competition of enterprises of all types of ownership on an equal footing, and guiding the sound development of the non-public economy. While doing a good job in helping State-owned enterprises move out of difficulties, attention should be attached to the development of the non-public economy and strive to create an environment for fair competition. Efforts should be pooled to intensify policy guidance, provide diversified services, and promote non-public enterprises to operate in accordance with the law and enhance their quality.

According to Minister Sheng, the progress of the economic and trade work in 1999, particularly the noticeable improvement in the sector's economic returns, has laid a good foundation for the work in 2000. In 1999, the economic returns of State-owned and State holding industrial enterprises significantly exceeded that of the previous year. Their profits in the first three quarters hit 48.9 billion yuan, up 2.5 times on the same period of 1998. Although the progress is of the nature of rehabilitation and the reform and development of enterprises still face many difficulties, it boosted morale and enhanced the confidence in achieving the three-year goal for enterprise reform.


Minister Sheng stressed that in 2000, the economic and trade sector should give top priority to the reform and development of SOEs, with focus on structural readjustment. It is necessary to combine the efforts to deepen the reform of enterprises and readjust industrial structures, and intensify strategic regulation and reorganization in accordance with the principles of developing what should be developed and withdrawing what should be withdrawn. Special measures should be taken in accordance with the different conditions of SOEs. For those that need to be expanded, methods of reorganization or association will be introduced. For those that could be saved, the method of debt-equity transfer will be exercised. For those that must be upgraded, efforts will be made to renovate their key technologies. Those that must be eliminated should declare bankruptcy or be closed down. Various ways should also be adopted to invigorate SMEs over which control should be relaxed. Unremitting efforts in these aspects will help improve the State-owned economy as a whole and promote the more coordinated and sounder development of the State-owned sector and the economy of other types of ownership.