ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Politics of Indonesia s Forest Fires

reforms of the last two decades have stopped short, despite their manifold problems. They remain technologically backward, they mop up nearly 90 per cent of the loans granted to Chinese enterprises by the state-owned banks and yet produce less than 40 per cent of its industrial output, wages are constantly being cut and the bulk of them are inefficient loss-making enterprises. This has been long recognised as the Achilles heel of the reforms in view of the far-reaching implications of the inevitable labour unrest which would follow drastic measures such as shut down of the loss-making firms or declaring them bankrupt. Now Jiang Zemin's Report suggests that about 1,000 of the biggest and crucial enterprises which account for more than two-thirds of the total state output, would be under state control, while in the case of the others, the state will gradually withdraw, relax control and invigorate them by way of 'reorganisation, association, merger, leasing, contract operation, joint stock partnership or sell off',.. Taken as a whole, the implications of this approach to reforming the SOEsie, separating ownership from management to raise efficiency and modernise their working make this one of the most radical junctures in the Chinese economic reforms. In many ways, this restructuring giving full play play to the market mechanism could easily pave the way for full-scale privatisation.
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