DATE=3/9/99
TYPE=BACKGROUND REPORT
NUMBER=5-42798
TITLE=CHINA/STATE SECTOR REFORM
BYLINE=STEPHANIE HO
DATELINE=BEIJING
CONTENT=
VOICED AT:  

INTRO:  AS CHINESE LEGISLATORS CONTINUE THEIR ANNUAL SESSION IN 
BEIJING, ONE ISSUE THAT UNDERLIES ALL DISCUSSIONS IS THE 
COUNTRY'S ONGOING REFORM OF THE LUMBERING STATE SECTOR.  AS VOA'S
STEPHANIE HO REPORTS, MILLIONS OF PEOPLE  NATIONWIDE WERE LAID 
OFF LAST YEAR, AND THE NUMBER IS EXPECTED TO CONTINUE GROWING 
THIS YEAR.

TEXT:  THIS IS THE SECOND YEAR IN CHINA'S THREE-YEAR PLAN TO LIFT
THOUSANDS OF LOSS-MAKING LARGE AND MEDIUM-SIZED STATE-OWNED 
ENTERPRISES OUT OF THEIR DIFFICULTIES.   MANY OF THEM WILL BE 
REORGANIZED OR ALLOWED TO GO BANKRUPT -- THROWING MILLIONS OF 
PEOPLE OUT OF WORK.

IN HIS REPORT TO THE NATIONAL PEOPLE'S CONGRESS FRIDAY, CHINESE 
PREMIER ZHU RONGJI (HEARD HERE THROUGH AN INTERPRETER) STRESSED 
THE IMPORTANCE OF STATE-SECTOR REFORM.

        // ZHU INTERPRETER ACTUALITY //

   THE YEAR 1999 IS A CRUCIAL YEAR FOR ACHIEVING THIS OBJECTIVE. 
WE  ARE NOW CLEAR ABOUT THE GENERAL APPROACH AND THE PRINCIPLES 
AND POLICIES FOR THE REFORM OF STATE-OWNED ENTERPRISES. 

          // END ACTUALITY //

THE STATE ECONOMIC AND TRADE COMMISSION HAS MAIN RESPONSIBILITY 
FOR REFORMING STATE COMPANIES.  THE COMMISSION'S CHAIRMAN, SHENG 
HUAREN, SAYS SEVERAL FACTORS TOOK THEIR TOLL ON CHINA'S STATE 
INDUSTRIES LAST YEAR -- INCLUDING THE ASIAN FINANCIAL CRISIS, 
SEVERE FLOODING IN CHINA AND SLUGGISH DOMESTIC DEMAND.

          // SHENG ACT // (CHINESE)  

  SO, THE NUMBER OF LOSS-MAKING ENTERPRISES LAST YEAR WAS  MORE 
THAN IN THE YEAR 1997, AND THE PROFITS OF THESE COMPANIES HAVE 
ALSO SEEN A DECREASE.

         // END ACT //

MR. SHENG SAYS BECAUSE OF THESE DIFFICULTIES, THE GOVERNMENT IS 
TAKING THIS ISSUE VERY SERIOUSLY.

        // SHENG ACT // (CHINESE)  

 WE HAVE TAKEN MORE STRIDENT STEPS THAN WE HAVE EVER UNDERTAKEN 
IN ANY PREVIOUS YEAR.

           // END ACT //

MR. SHENG SINGLES OUT DUPLICATED PRODUCTION -- ESPECIALLY IN THE 
TEXTILE, COAL, OIL AND PETROCHEMICAL INDUSTRIES -- AS ONE OF THE 
STATE SECTOR'S PRIMARY PROBLEMS.  HE SAYS LEADERSHIP IN STATE 
COMPANIES IS ALSO AT FAULT, AND ADDS THAT MANAGERS WHO FAIL TO 
PERFORM THEIR JOBS WELL WILL BE REMOVED.

            // SHENG ACT //

  IN THE FIRST YEAR OF THE LOSSES OF THESE ENTERPRISES, THE 
MANAGEMENT  WILL RECEIVE A YELLOW CARD.  WHEN THE SITUATION OF 
LOSS-MAKING  CONTINUES FOR ANOTHER YEAR, THEN THE MANAGEMENT WILL
GET A RED CARD, MEANING THEY WILL BE REMOVED FROM OFFICE.

          // END ACT //

THE CHINESE OFFICIAL SAYS ANOTHER PROBLEM IS WHAT HE REFERS TO AS
A LARGE NUMBER OF REDUNDANT WORKERS -- WHO WILL BE PERMANENTLY 
LAID OFF WHEN THEIR STATE FACTORIES CLOSE.

ALTHOUGH MR. SHENG DID NOT HAVE AN EXACT UNEMPLOYMENT ESTIMATE 
FOR THIS YEAR, HE PREDICTED IT WOULD NOT BE HIGHER THAN LAST 
YEAR'S OFFICIAL FIGURE OF 11-MILLION.

         // SHENG ACT // (CHINESE) 

  THE FIGURE OF LAYOFFS THIS YEAR WILL STILL BE CONSIDERABLE.  
HOWEVER, I DO NOT BELIEVE THAT THE FIGURE WILL BE BIGGER THAN 
THAT OF LAST YEAR. 

          // END ACT //

FOR CHINA'S MILLIONS OF STATE WORKERS, LOSING A JOB CAN ALSO MEAN
AN END TO THE CRADLE-TO-GRAVE SYSTEM OF SOCIAL BENEFITS KNOWN AS 
"THE IRON RICE BOWL."  RESULTING DISSATISFACTION CAN LEAD TO 
WORKER PROTESTS, WHICH, IN TURN, THREATEN CHINA'S SOCIAL 
STABILITY.

MR. SHENG ACKNOWLEDGED THAT SUCH DEMONSTRATIONS HAVE OCCURRED.

           // SHENG ACT // (CHINESE) 

  I THINK THIS REFLECTS THAT THESE PARTICULAR ENTERPRISES  HAVE 
NOT DONE THEIR WORK PROPERLY WITH LAID OFF WORKERS SO THEY NEED 
TO PAY MORE ATTENTION TO DOING THEIR WORK MORE SUCCESSFULLY.

              // END ACT //

HE SAYS ENTERPRISES ARE RESPONSIBLE FOR PROVIDING THEIR LAID-OFF 
WORKERS WITH A LIVING ALLOWANCE AND RE-TRAINING.  MOST OF ALL, 
THOUGH, HE SAYS HE HOPES THE CHINESE PEOPLE WILL UNDERSTAND THAT 
CHINA'S ECONOMY IS IN A TRANSITION AND THAT THE LAY-OFFS WILL 
CONTINUE.  (SIGNED)

NEB/HO/FC

09-Mar-99 1:28 AM EST (0628 UTC)
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Source: Voice of America
.