South China Morning Post - China
Monday, September 27, 1999
Shenyang woos foreigners to manage firms
New life: Mayor Mu Suixin
JOSEPHINE MA
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Shenyang is prepared to hand over the management of its state-owned
enterprises to private and foreign investors in order to save the
ailing sector, said Mayor Mu Suixin.
The northeast industrial city, capital of Liaoning province, was also
seeking foreign help to inject new life into its state firms, said Mr
Mu.
A team of British consultants had visited Shenyang to determine ways
of allowing foreign companies to take over management of the city's
state-owned enterprises and turn them around, he said.
A British Department for International Development team had also been
assessing ways to allow foreign enterprises to manage state assets.
"We are also working with a British company on how to transfer our
state assets and their management to investors on the international
market," said Mr Wu.
The mayor said the municipal Government would continue to own 126
large state-owned enterprises in Shenyang but the rest would be handed
over to the market.
He stressed the handover was different to privatisation - a taboo
subject on the mainland - saying the companies were not sold to
private individuals but corporations.
Nevertheless, Mr Mu admitted that past efforts by the Government to
save state sectors had not been successful. A turnaround had to be
built from the ground up, not just by injecting funds into bankrupt
companies.
"Rescuing state enterprises alone cannot revive the state sector," he
said.
"We have tried this before and it did not work out well. We have to
restructure the sector strategically."
Shenyang had already handed over management of dozens of small- and
medium-sized state-owned enterprises last year to private firms, but
Mr Mu would not give a specific figure.
He said the city Government would inject more assets into the Shenyang
Special Environment Protection Equipment Co - which is to be listed on
the New York stock market - and seek the public listing of some of its
high-technology companies in Hong Kong to raise funds.
But even with such moves, Mr Mu said about 20 per cent of Shenyang's
state-owned firms would still be unprofitable by the end of next year,
missing a three-year turnaround deadline set by Premier Zhu Rongji in
1997.
But Mr Mu would not concede failure, insisting that Shenyang had
largely fulfilled the task set by Premier Zhu.
Despite frequent overseas reports of industrial unrest, Mr Mu said
Shenyang, which has a population of 6.9 million, had only about
400,000 unemployed workers. The city was stable, he said.
"There is no instability in the city and there is no protest on the
streets," he said.
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