The Fourth Plenary Session of the Fifteenth Central Committee of the CPC

It was convened in Beijing from September 19 to 22, 1999. The Plenary Session carefully summarized the initial experience accumulated in promoting the reformation and development of state-owned enterprises and considered and adopted the “Decision of the CPC Central Committee on Several Major Issues Concerning the Reform and Development of State-owned Enterprises”.

The Plenary Session advocated that promoting the reformation and development of state-owned enterprises is a major and urgent task. The “Decision” emphasized that state-owned enterprises are the pillars of the national economy, and that the development of the productive forces of socialist society and the industrialization and modernization of the country shall always rely on and should bring into play the important role of state-owned enterprises. The reformation of the state-owned enterprises is the central link of the reform of the whole economic system, and that China should vigorously promote the institutional reform, management system transformation, structural adjustment and technological progress and innovation of state-owned enterprises.

The Plenary Session highly valued the important role of state-owned enterprises in promoting China's economic and social development and its role in consolidating the socialist system. The Plenary Session determined and proposed the main goals of the reformation and development of state-owned enterprises from 1999 till 2010 and the guidelines that must be adhered to in this period.

The ten guidelines were: (1) Developing diverse forms of ownership side-by-side with public ownership dominant. The ownership structure must be readjusted and perfected. Multiple forms for materializing public ownership must be actively explored; (2) To strategically adjust the layout of the state-owned economy and restructure state-owned enterprises; (3) Combining reform with restructuring, transformation and intensified management. To meet the demands of the market economy, efforts should be made to transform the operational mechanism of enterprises, enhance their overall quality, and construct a micro-base for industrial structure optimizing and high efficient economic operation; (4) To comprehensively establish a modern corporate system. Efforts must be made to achieve clearly established ownership, well-defined power and responsibility, separation of enterprise from administration, and scientific management, to perfect systems of decision-making, implementation and supervision; (5) Pushing forward scientific and technological advancement of enterprises; (6) Comprehensively enhancing enterprise management. It is imperative to pursue scientific management; (7) Establishing a competitive mechanism of survival of the fittest. We should encourage enterprise mergers, standardize bankruptcy procedures; (8) Coordinating various supplementary reforms. Efforts should be made to transform government functions, establish well-defined State assets management, supervision and operation power and responsibility systems and ensure that the State assets' value be preserved and increased; (9) Relying on the working class whole-heartedly and giving full play to the role of Party organizations as the political nucleus within enterprises. It is necessary to strengthen the constructing of enterprises' Party organizations and their ideological and political work, upgrade the qualities of managers; (10) Promoting enterprises' ethical and cultural progress. Enterprises should intensify ideological, and moral education and technical training.

The Plenary Session pointed out that to accomplish this historical task, first of all, China must do her best to achieve the three-year goal of reforming and restructuring the state-owned enterprises. The Plenary Session pointed out that the strategic adjustment of the layout of the state-owned economy should be combined with the optimization and upgrading of the industrial structure and the adjustment and improvement of the ownership structure, while adhering to the principles of developing what should be developed, withdrawing what should be withdrawn, doing what should be done while leaving others undone, as well as defined those Industries and sectors that need to be controlled by the state sector as those industries that are related to national security; industries that are naturally monopolized; industries that supply major products and services for the public; and pillar industries and backbone enterprises in high and new technology sectors.

The Plenary Session emphasized that the establishment of a modern corporate system, is the orientation of the reformation of state-owned enterprises, which is also an effective way to combine public ownership with the market economy.

The Plenary Session put forward that reforming the asset and liability structure of state-owned enterprises and reducing the social burden of enterprises should be combined with the deepening of the internal reform of enterprises, establishing new mechanisms and strengthening scientific management. The Plenary Session emphasized that to adapt to the global industrial restructuring trend and changes in domestic and international market demand, China must improve the technological progress of state-owned enterprises and industrial upgrading. And effective policy measures should be taken to increase investment in key industries, key enterprises, encourage investment to go to the projects designed to improve technology, and their products have ready markets and economic returns and high technology products.

The Plenary Session stressed that strengthening and improving the leadership of the Party is the fundamental guarantee to accelerate the reform and development of state-owned enterprises. At the dawn of the new century, the Party should strengthen its own construction in all aspects. The Party should strive to create a new situation for the reform and development of state-owned enterprises and comprehensively push the great cause of building socialism with Chinese characteristics while entering into the 21st century.