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Premier says China's state sector robust
(Xinhua)
Updated: 2008-03-05 10:19

Chinese Premier Wen Jiabao voiced satisfaction over the vitality of the state sector, saying its impact and influence on the national economy are "greatly enhanced" over the past five years.

The total value of assets of state owned enterprises (SOEs) in 2006 grew by 60.98 percent compared to 2002, their total profits increased by 223 percent and their tax contributions grew by 105 percent, Wen said in his report to the First Session of the 11th National People's Congress opening in Beijing on Wednesday.

Reviewing the central government's work over the past five years, Wen said China consolidated and developed the public sector, made progress in reform of the management system for state-owned assets and adjustment of the distribution and structure of the state sector, and set up and improved a system for investors of state assets.

"We accelerated the reform to institute a stockholding system in SOEs, and a number of large companies and conglomerates with the ability to compete internationally were formed. Reform of the postal service system proceeded smoothly, and encouraging progress was made in reforming the power, telecommunications, civil aviation and railway industries," said Wen.

He noted the country's strategy of rejuvenating the old industrial bases such as northeast China, increased efforts to develop large grain production bases, breakthroughs in reforming, reorganizing and upgrading SOEs, major progress in using Chinese made key equipment instead of imports, and headways in the trial to transform the economies of cities dependent on resource exploitation.

"The old industrial bases are now showing new signs of vitality," he said.

This year, Wen said China would advance the reform of SOEs and improve their ownership structure. "We will continue to adjust state-owned assets and reorganize SOEs.. deepen the reform to convert SOEs into stockholding corporations.. improve corporate governance, carry out policy-mandated closures and bankruptcies, separate SOE's secondary businesses from their core businesses, and covert the former into independent companies."

The country would expand the experiment of setting up a budget system for managing state capital and deepen the reform of monopoly industries by introducing competition and strengthening government regulation and public supervision, Wen said.

He said China needed to "strictly standardize procedures for transforming SOEs into stock companies" and for transferring ownership of state-owned assets to prevent their erosion.



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