Foreign investors able to buy large SOEs
By Wu Yong in Shenyang and Fu Jing in Beijing (China Daily)
Updated: 2005-09-16 05:57

Hotard praised the move, saying he believed the new policy would not only establish a model, but would also help speed up the development of the local economy.

About two months ago, the provincial government was taking bids on its 24 large-scale SOEs, but there were restrictions on some industries.

"This may seem a rather bold action - even today, when China has had its door open for more than two decades," said Liu Changjie, a freelance writer for the Economic Observer. "But I think this was a must for local governments."

Li Xiangping, an economist at the Liaoning Academy of Social Sciences, agreed. Most of the small and medium-sized SOEs had undergone reform in Liaoning, Jilin and Heilongjiang provinces of Northeast China. The main problem, therefore, was how to reform large SOEs.

"It is hard to follow the same route (for the large SOEs) as the small ones, because this involves big money and a transition in the management system," Li said.

The purpose of the No 36 document, which the central government actually issued a month ago, is to help the industries in the Northeast attract more investment. To revive the region, the central government has provided more preferential policies for foreign companies that invest there.

It is a policy that will continue.

"We will adopt flexible policies and measures to attract overseas investors to make profits in Northeast China," said an official with the Office for Revitalizing the Old Industrial Base in Northeast China under the State Council.

Even so, "there are two hurdles that hold back large-scale SOE reform," said Lin Muxi, chief of business school from local Liaoning University. "One is debt, and the other is redundant staff. Now the document frees them from these bonds."

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