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China to end gov't bailout for bankrupt SOEs
(Xinhua)
Updated: 2005-03-27 09:31
China will stop subsidizing bankrupt state-owned businesses within four
years, an official with the State-owned Assets Supervision and Administration
Commission (SASAC) said 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.
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