The Path of State-Owned Enterprises Towards the Market

Author: Chen Qingtai
Publisher:
Publishing Date: 2000-01-01
Features: In 1992, the 14th National Congress of the Communist Party of China established the reform goal of building a socialist market economy system. In 1993, the Decision on Several Issues Concerning the Establishment of a Socialist Market Economy System, adopted by the Third Plenary Session of the 14th Central Committee, outlined the blueprint for achieving the economic system transformation. In 1994, major reforms in macro-management, primarily in finance and taxation, were implemented, forming the initial framework of the new system. As the process of rapidly advancing toward the new system pushed state-owned enterprises to the focal point of contradictions, the reform of state-owned enterprises became the central link of the economic system reform and entered the critical stage. Meanwhile, after the economic overheating from 1992 to 1993, as the economy cooled down, the supply-demand relationship reversed, and the buyer's market rapidly expanded across industries and regions. Market competition intensified, and the polarization between enterprises became irreversible. State-owned enterprises faced severe tests in adapting to the market. The deep-seated contradictions accumulated in state-owned enterprises under the old system were fully exposed. At this point, the government could no longer help enterprises that had lost their market; further decentralization of power had reached its limit; preserving every state-owned enterprise became impossible; and tax cuts and profit-sharing no longer aligned with the reform direction. The ideas, methods, and means of deepening enterprise reform must undergo major adjustments. Coincidentally, during this period, I was assigned to oversee enterprise and enterprise reform work at the State Economic and Trade Commission (SETC, which was known as the State Economic and Trade Office before March 1993). I came to SETC from Dongfeng Motor Company in September 1992 and stayed until August 1998. During this time, the historic transformation of the economic system and the significant fluctuations in the state of enterprises deeply affected tens of thousands of state-owned enterprises and hundreds of millions of workers and citizens. The Communist Party of China Central Committee and the State Council implemented strong leadership in the reform of state-owned enterprises. The SETC, relevant ministries and commissions of the State Council, local governments, and enterprises all prioritized enterprise reform, promoting and supporting it from different perspectives, continuously achieving new breakthroughs in the theory and practice of state-owned enterprise reform and making historic progress in this pioneering endeavor. With over 20 years of experience in state-owned enterprises, I have tasted the sweet, sour, and bitter aspects of their reform. Now, as one of those involved in advancing the reform of state-owned enterprises, I deeply understand that this reform is of great importance and that it is an extremely challenging endeavor. To be able to participate in this historic transformation, I feel a profound sense of responsibility. During this period, I devoted all my energy and time to this cause, accompanying the reform of state-owned enterprises day and night, which has given me the privilege of experiencing and participating in the entire process of this period's reform. The reform of state-owned enterprises is a long journey. Past efforts have laid the foundation for today's progress, and today's work paves the way for tomorrow's reform. To move forward, one must take steps one at a time. The experiences and participation I had in the government department were only a part of the process of reforming state-owned enterprises. This book compiles some of my speeches and articles from that period in chronological order, aiming to reflect, from one perspective, the historical process of state-owned enterprises' transition to the market during this time. The texts in this book lack theoretical depth and rigorous logic; they are not a theoretical achievement but rather a record of a participant's work in the reform process of state-owned enterprises. Therefore, during the reorganization, I have tried to preserve the original form and meaning of the manuscripts as much as possible, except for removing repetitive content and purely work-related material. A background introduction is added before each article to help readers understand the historical footsteps of state-owned enterprises as they moved toward the market. In recent years, my work has been carried out under the guidance of the policies and principles of the Communist Party of China Central Committee and the State Council, under the leadership of the Party Group of the SETC, and in collaboration with my colleagues from various departments and local governments. The ideas of my colleagues have deeply inspired me, and the practices of local governments and enterprises have broadened my horizons. It must be sincerely stated that the correct understandings and viewpoints in each article are largely the collective creation of understanding and absorbing the central spirit and opinions of my colleagues; while some controversial and potentially incorrect viewpoints mostly stem from my own limited understanding and one-sided interpretation.