SCMP/H.Kong : Radical state-firm reforms proposed

[bich dao <daotb@yahoo.com>]

Thursday, September 23, 1999

CENTRAL COMMITTEE PLENUM

Radical state-firm reforms proposed

WILLY WO-LAP LAM

President Jiang Zemin has recommended radical restructuring of state
firms while avoiding proposals that could be construed as privatisation.

The communique of the just-ended fourth plenary session of the Central
Committee suggests the restructuring of state firms through means
including mixed ownership. 

It argues that "state ownership" could manifest itself effectively in
many forms. 

"We should assiduously develop the
shareholding system and an economy with mixed ownership," the plenum
document says. 

"We should continue to bring about the
strategic reorganisation of state-owned enterprises."

Mr Jiang, who gave a keynote speech at the plenary session, confirmed
the partial retreat of the state from the economy. 

"We should uphold the principle [of the
state sector] making advancement as well as retrenchments," the document
says. 

It adds that state-controlled firms should engage in certain areas but
also pull out from other parts. 

It is understood Mr Jiang wants state firms to gradually withdraw from
"competitive" industries and product lines, where the non-state sector,
including private and foreign firms, can play a bigger role. 

But a Beijing think-tank member said Mr Jiang was trying to steer a
middle course. 

The plenum communique, which reflects Mr Jiang's way of thinking, does
not mention radical solutions such as the sale of a large number of
state firms to private entities. 

Nor does it cite a specific target for the conversion of large state
firms into shareholding companies. 

Most importantly, Mr Jiang reassured sectors of society that stood to
lose from reform, particularly laid-off workers. 

The document salutes the "ineffable, major contribution made by the
working class". 

At the plenary session, Mr Jiang pledged that the interests of the
working class, including the unemployed, would be taken care of. 

The communique also plays up the importance of guidance of enterprises
by party committees. 

"Strengthening and improving party
leadership is the fundamental guarantee for speeding up the reform of
state enterprises," it says. 

The plenum said Beijing should encourage more enterprises to "reorganise
their debts and assets". 











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