ABSTRACT
This chapter presents the position occupied by state-owned enterprises (SOEs) among all of China's enterprises. The position of SOEs in Chinese industry has declined to some one-third; the remaining two-thirds comprise constituents of the market economy. The problem of losses by the SOEs became evident during the economic tightening following the Tiananmen Incident. In the revitalized atmosphere following Deng Xiaoping's 1992 Southern Excursion Talks, SOE profits increased in 1993 and 1994, only to decline again sharply in 1995 and 1996. The chapter illustrates the "social security" burdens of SOEs. The excessively generous SOE pension system is effectively consuming all the resources, and this, more than anything else, is seen as a manifestation of the "superiority of socialism". The chapter then presents a rough summary of the issues raised in Jiang Zemin's report. Jiang Zemin's report offered the possibility that SOE reform could take many forms, but it was emphasized that any reform should support and not undermine "public ownership".
