Li Rongrong, new minister of the influential State Council department, yesterday said State-owned enterprises (SOEs), after basically turning around their loss-incurring operations, show promise of developing more rapidly in the years ahead.

Li, in his first-ever interview with the media after being named last week as the new chief of SETC - replacing former minister Sheng Huaren - said the achievements in SOE reforms and efforts to stem deficits over the past few years have reinforced the authorities' confidence in running successful State-owned businesses within the framework of a market economy.

So far, at least 65 percent of China's 6,599 large and medium-sized SOEs - which were identified as deficit-ridden in 1997 - have reversed their money-losing trends, according to the latest SETC statistics.

Total profits from State-owned industrial firms and State-holding industrial businesses reached 239.2 billion yuan (US$28.8 billion) last year, an increase of 190 percent over those for 1997, the statistics indicated. But these figures seemed not to be the only factors leading Li to paint a rosy picture for the country's SOEs in the years to come.

"The crowning achievement, I think, is the shift in the management patterns of the SOEs and the attitude of the workers over the past couple of years," Li said.

Three years ago, it was difficult for many SOEs to accept such words as "modern corporate enterprise systems," "bankruptcy" and "shedding workers," but nowadays both SOE management and employees embrace the ideas and support SOE reform, he said.

Commenting on the draft 10th Five-Year Plan's urging to the acceleration of the establishment and improvement of a modern corporate structure, Li said without a good corporate enterprise system, the achievements gained in SOE reforms in the past years could not be consolidated.

With a solid foundation laid in the Ninth Five-Year Plan, the SETC plans to foster up to 50 colossal enterprise groups and companies capable of competing in the global market by the year 2005.

As is described in the country's proposed economic blueprint for 2001-05, these companies and groups need to have their own intellectual property rights and core products, and should become key players and pillars in industrial readjustment, said Li.

In addition to stressing technological innovation, Li also said the SETC will develop a mechanism for removal from the market of enterprises that produce unmarketable products, deplete resources and pollute the environment.

(China Daily 03/06/2001)