Reflections On Deepening The Reform Of State-owned Large And Medium-sized Enterprises

State enterprises, especially large and medium-size key enterprises, are strong pillars of industry and state-owned economy of our country, and consistently control the national economy life-line, as an important symbol of economy comprehensive strength of our country. Developing state enterprise is an economic issue and also a political task. It is very important. The reforming of state enterprises is a center link of economy system reforming, and a hot point concerned by all fields as well. Party Central Committee stresses on state enterprise.Through 20 years study, especially since the 14th National Congress, enterprise have made unprecedented achievements. But, the state enterprise reforming is the most difficult. Generally, state enterprises have not really become the market main body of independent businesses in management and with sole responsibility for profit and loss. The microscope foundation of the socialist market economy has some shortcomings. The role of market mechanism is rather limited. On the fourth plenary session of our Party's 15th Central Committee, it is clearly points out: "It is an important and urgent task to carry forward and develop state enterprise reforming." "Learning other's advantage and overcome our own shortcomings". So, it is of great significance to investigate, research Chengdu Engine (Group) Co. Ltd. (CEGC) reforming practice, and sum up CEGC's reforming experience. It is helpful to the reforming of large and medium-size enterprises.This article has three parts. In the first part, it mainly describes the reason of CEGC reforming and concrete actions. CEGC (420 factory) is a large military enterprise of producing aero-engines. Since the late 1970s, after changing military products into civil products, CEGC has had its reform concerning the delegation of its power to lower levels and the implementation of profit and contract business responsibility. But the form of the owner-ship and the business mechanism have not been reformed. It has high liability rate, more employees than needed and more social burden. Since the new top management assumed office in 1995, it has summed up CEGC's experience of success and lesson of failure in the production of civil products, cleared development direction, firmly taken the road of "reform, reorganization, remoulding and strengthening management" in order to solve difficulty, and conducted the reform bravely and resolutely. CEGC has successfully performed preferable usage of assets, the reform of personnel and distribution system, decreased personnel and increased benefit, removed personnel posts and arranged other jobs (re-employment), separated the third industry from the second industry, achieved certain efficiency and created the conduction of modern enterprise system to CEGC.The second part: Analysis of reforming efficiency of CEGC. After its reform for 5 years, from 1997 on, CEGC has performed policy loss stop and eliminated hidden loss of more than 100 million. The efficiency is obviously shown in the following items: 1. The traditional modes of thought of workers and cadres have been deeply changed. 2. CEGC has extended great progress in development of new products. 3. CEGC has changed single ownership by the whole people and realized ownerships by different investigators. 4. CEGC has won outstanding efficiency in decreasing personnel and increasing benefits. 5. CEGC has achieved a breakthrough in the reform of personnel and distribution system. 6. CEGC has peeled assets of non-operation, separated the third industry from the second industry and performed the adjustment of industrial structure. Those achievements have created very favourable condition for getting "transfering debt into stock" policy from the government and CEGC has been put into the list. Then, 6 items of enlightenment are stated: 1. During the reform, traditional modes of thought must be changed at first; 2. Assets reconstruction should be conducted; 3. Breakthrough in personnel and distribution system should be achieved; 4. A friendly operation m...