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Promote core business
2004-08-24
China Daily
Large State-owned enterprises should focus on developing their core business, says an article in the People's Daily. An excerpt follows:
After the central government issued measures to cool down investment in over-heated industries, some enterprises in these sectors, especially privately owned ones, tried to ease pressure by seeking co-operation with large-scale State-owned enterprises.
Given the situation, the State-owned Assets Supervision and Administration Commission with the State Council required the enterprises directly under the central government must report such co-operation.
This stipulation is meant to propel those large State-owned enterprises to focus on their own core business.
The competition among enterprises is mainly supported by their competitiveness in their own core activity. Large State-owned enterprises have made tremendous progress in improving their core business, but most of them still have much room to improve in this aspect.
Primary statistics show that only 50 of the 190-plus enterprises directly under the central government have a definite field of core business and another 50 of them have four or more fields of business with a relative competitive edge.
When the business scope is too diversified, enterprises will have difficulty to enhance competitiveness and sustain development.
Large State-owned enterprises should consider the macroeconomic situation both at home and abroad to find their own core businesses.
As long as they make such choices, they should overcome market fluctuations and stick to their set choices.
Usually, when most enterprises in the sector feel difficulties developing, it is a good time to accelerate development as well as test the competitiveness of their company.
Technological innovation is the key to improving competitiveness. It is necessary for large State-owned enterprises to invest more in research and development and try to master advanced technologies.
They should also put priorities on reforming management and introducing more investors.
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