China will stop subsidizing bankrupt State-owned businesses
within four years, an official with the State-owned Assets
Supervision and Administration Commission (SASAC) said in Beijing
Saturday.
The commission's four-year-plan has been approved by the State
Council, said Shao Ning, vice minister in charge of the commission,
at a forum held on Saturday.
In four years, SOEs (State-owned enterprises) will follow market
rules and apply for bankruptcy according to the same laws and
regulations as foreign and private companies.
In order to help the badly performing SOEs to retreat from the
market smoothly, the Chinese government has made a series of
favorable bankruptcy policies on employees' rights, assets
management and bad loans.
In recent years, 3,377 SOEs with bad performance have gone
bankrupt under these policies with 6.2 million employees involved.
There are still more than 1,800 SOEs to be closed down.
On February 2, an executive meeting of the State Council said it
approved the bankruptcy plan. So far, Beijing, Shanghai, Jiangsu,
Zhejiang and Fujian have stopped the government bailout
practice.
The draft corporate bankruptcy law was submitted to China's top
legislature for first hearing last June.
(China Daily March 27, 2005)