DATE=1/25/2000
TYPE=CORRESPONDENT REPORT
TITLE=CHINA / STATE ENTERPRISES (L ONLY)
NUMBER=2-258405
BYLINE=ROGER WILKISON
DATELINE=BEIJING
CONTENT=
VOICED AT:
INTRO: One of China's top economic officials says the
country's ailing state-owned enterprises are returning
to profitability. But, as VOA correspondent Roger
Wilkison reports, the official acknowledges that -- as
restructuring of the firms proceeds -- unemployment is
bound to increase.
TEXT: Sheng Huaren -- the minister in charge of
China's State Economic and Trade Commission -- says he
is confident the government will achieve its goal of
getting most large state-owned enterprises out of debt
by next year.
Mr. Sheng says layoffs and management reforms
increased profits of major state-owned industries last
year by 70 per cent, to nearly 11 billion dollars. He
says the year 2000 will be crucial in preparing those
firms for survival in a market economy. But he says
he expects profits of the state sector to be even
higher this year.
In late 1997, China's ruling Communist Party proposed
overhauling the creaky state sector as part of its
efforts to modernize the economy. Though state firms
now account for only about half of China's gross
domestic product, they still dominate key sectors and
employ most of the country's urban workforce. But the
government has made clear that many of those companies
will be merged or allowed to fail.
Speaking through an interpreter, Mr. Sheng's vice-
minister Jiang Qiangui told a Beijing News conference
that intensifying the restructuring of state companies
will lead to further unemployment.
//INTERPRETER ACTUALITY//
There will still be enterprises, which will withdraw
from the market through closures and bankruptcy, and
enterprise workers will continue to be laid off.
//END ACTUALITY//
Ms. Jiang says that, of 11 million workers laid off
last year, more than half have not yet found jobs.
She says China's urban unemployment rate is now just
over three per cent, but most independent estimates
are that joblessness is at least twice that figure.
Mr. Sheng says the government's major weapon in
turning state firms around is an ambitious debt-for-
equity swap that is aimed at clearing the firms' bad
debt. One Chinese newspaper -- The Economic Daily --
has criticized the program, saying it has stalled
because of resistance by local officials who refuse to
close down loss-making companies because they are
afraid of creating unemployment.
But Mr. Sheng says 78 companies have so far converted
more than 13 billion dollars in non-performing loans
from state-owned banks into shares. He acknowledges
that is only a fraction of the two thousand firms that
have applied to join the program. But he says the
asset management companies set up by the banks to
manage the swap have set stringent conditions for
participants in the scheme.
Foremost among them -- says Mr. Sheng -- is good
management and the ability of the companies to sell
their products in the market. (SIGNED)
NEB/RW/GC/FC
25-Jan-2000 05:26 AM EDT (25-Jan-2000 1026 UTC)
NNNN
Source: Voice of America
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