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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: Stoctrash who wrote (26200)	12/5/1997 1:08:00 PM
From: DiViT	Read Replies (2) \| Respond to of 50808

Real or not? forbes.com forbes.com

To: Stoctrash who wrote (26200)	12/5/1997 2:54:00 PM
From: BillyG	Respond to of 50808

China outlook (cont.) -- sorry, I can't post the source, but it is good............ September 22, 1997 LENGTH: 620 words COUNTRY: China HEADLINE: Structural review BODY: Foreign debt The stock of China's external debt has risen rapidly since the mid- 1980s, boosted by borrowing to finance imports and by heavy government expenditure. Total external debt reached an estimated $123.8bn in 1996, of which 81% was accounted for by public medium- and long-term debt. Total debt remains low as a percentage of GDP, at only 14.7% in 1996, and China's transformation into a major trading nation has ensured that the debt-service ratio (paid) remains well under control, at 9.9% in 1996. China's large reserves have resulted in a very low level of net debt, which stood at $18bn in 1996. Key policies One of the biggest challenges facing China is the reform of its struggling state-owned enterprises (SOEs). There are more than 100,000 industrial SOEs in China, of which around 44% were estimated by the World Bank to have made losses in 1995, imposing a heavy burden on the state budget and dampening growth in industrial output. At the 15th National Congress of the Chinese Communist Party (CCP) in mid-September, a pledge was made to restructure larger SOEs into internationally competitive organisations, while at the same time consolidating the many thousands of smaller SOEs. Many small SOEs have already been restructured through methods including sales, mergers and bankruptcies. This process will be speeded up in 1997-98. Concern over high levels of urban unemployment will give added impetus to the development of welfare systems and re-employment schemes. Foreign direct investment will continue to be welcomed, although the government will try to direct more investment into China's less developed inland regions, and will erode the tax benefits offered to foreign investors in a bid to level the playing field with local companies. China's bid to join the World Trade Organisation will continue to force the pace of liberalisation and deregulation, although some sectors will remain heavily protected. Economic structure The state-owned enterprise sector accounted for 34% of industrial output in 1995 and will continue to play an important role in the economy in 1997-98. The restructuring of the sector will be painful, swelling the huge numbers of unemployed. Output growth will continue to be led by the collective sector and by foreign-funded enterprises. The agricultural sector accounted for only 17.9% of GDP in 1996, compared with industry's 54.4% share. Improving agricultural productivity is a key concern for the authorities, not least as the sector still employs more than 70% of the workforce. There are large income disparities between the more wealthy coastal provinces and the inaccessible hinterland, despite the authorities' efforts to redress the balance, and between rural and urban areas. Political structure The death in February 1997 of Deng Xiaoping, China's pre-eminent leader since 1979, marked the end of rule by the old guard of the CCP. The "third generation" of CCP leaders, grouped behind the president, Jiang Zemin, have been firmly entrenched for some years, and Mr Deng's passing has not led to either a leadership struggle or any sweeping policy changes. The five-yearly gathering of the CCP's National Congress, which started on September 12, functioned as a showcase for the "new" leaders, allowing Mr Jiang to emphasise his pre-eminent position. Political reform was not on the agenda, although the CCP is seeking to improve its legitimacy both by addressing the demands of disgruntled workers and by cracking down on corruption in high places.