Can Jiang Reform China's State Owned Industries?

`Grasp The Big, Release The Small'

Chinese state enterprises produce items no one wants. And managers rarely suffer the consequences. But across the country, that's about to change. Cities such as Shanghai and Guangzhou are key testing grounds for what is shaping up as one of the Chinese leadership's biggest assaults yet on the problems of the woebegone state sector. Overall losses last year increased by 38%. So since the February death of Deng Xiaoping, President Jiang Zemin has made state-enterprise reform a top priority as he bids to consolidate his power (table).

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