Kargil Take into confidence people's representatives To China Some aspects of State Owned enterprises reform in China

One of the most important aspects which attracts most of our attention is in regard to the steps, the Chinese government is taking in reforming their state owned enterprises (SOE) on their way to economic restructuring. We were also very keen to know the details about it. On the first day i.e. on 31st March Comrade Ma Wenpu, Vice-Minister, International department of the Central Committee, Communist Party of China met the delegation in the morning and briefed about the economic and political situation of the country and the world. In that discussion, in reply to Comrade Sitaram Yechury's query, he emphatically said that still today SOE constitute the main base of the Chinese economy. Nearly 80% of the total industrial production is still in the Public Sector. He ruled out any possibilities of weakening this sector. China, according to Com. Wenpu, is still a backward country and it would have to go a long way even to achieve a moderate stage of development and the experience also shows that highly centralised command economy did not help in rapid development of the economy. That is why the CPC has decided to uphold socialist orientation with a definite role of the market and other forms of ownership in the primary stage of socialist economy. Recently CPC has amended their constitution and incorporated the word "socialist market economy". The entire policy direction in regard to SOE is to strengthen it, to make it more competitive, efficient and economically viable so that it can withstand competition from the foreign multinationals both in the domestic and international spheres. Comrade Li Peng, in his address to the National Peoples Congress in March 1998 put forward eight suggestions on the work of the government where he said, "The reform of state owned enterprises is the principal task of the ongoing economic restructuring. We should be able to extricate most of the large and medium sized state owned enterprises operating at a loss from their predicament through reform, reorganisation, upgrading and improved management within about three years, and then we strive to establish the initial stage of modern enterprise system in the bulk of large and medium-sized state-owned key enterprises by the end of this century. In important industries and key fields, we should encourage the setting up of large enterprise groups in order to increase their competitiveness in both domestic and foreign markets. We should accelerate the reorganisation and readjustment of state owned enterprises, declare bankrupt according to the relevant regulations enterprises which have been operating at a loss for a long period of time and for which there is no hope of ending such a situation, and resolutely shut down a number of enterprises whose products are unmarketable and which are finding difficult to survive". In our country in the name of reform, the main aim of the Central government is to dismantle the public sector. But in China a gradual process of reform has been undertaken through downsizing, cutting of overhead expenditures, diversification and thorough modernisation with the application of latest development of science and technology. In certain sectors they have also gone for joint ventures with some of the giant multinationals but nowhere according to Comrade Ji Peng, Dy. Director foreign affairs department, share of the private sector is more than 49%. Comrade Wei Jianxing, member of the standing committee of the CPC Political Bureau who met the delegation on 1st April, said that at least three-fourths of the total industrial production is still in the public sector. But in downsizing the SOEs the most serious problem facing the Chinese government is the large number of workers who are being laid off. According to Comrade Ma Wenpu, nearly 5 to 6 million workers are being laid off every year whereas new jobs are created to the tune of nearly 6 to 7 million. There are nearly 5 million workers still to be re-employed. Comrade Ma said that their aim is to solve this problem within next two years and it is one of their top priorities in the coming years. There is a safety net for these laid off workers. They are paid a subsistence allowance, amount of which differs from area to area according to bare minimum required for sustenance. In Beijing, where standard of living is quite high the monthly allowance of a laid-off worker is around 300 Yuan (over Rs. 1,500/-). There are insurance schemes of different companies from which laid-off workers are paid. During our informal conversations with Comrade Ji Peng we came to learn that laid-off workers are paid for three years and if during that period they cannot find a job, they are asked to register their names in the employment department of the government where they are retrained for new kind of skill which may help them getting re-employment. This problem of re-employment is very acute particularly in those areas where SOEs are maximum in numbers.

We were also taken inside the factory. As that was Sunday, workers were in minimum number. But the factory is modern, equipped with highly sophisticated machines, the entire floor is fully air-conditioned, some of the machines are yet to be installed. It appears from the meeting with the party secretary and other officers of the factory that they are serious and very much concerned about the development of the company and also confident about its future prospect. They are whole heartedly supporting the reform measures taken by the government on the basis of the decision of the Central Committee of the Communist Party of China.