Enterprise Data

As explained in the appendix in this paper we draw on annual survey data from the National Bureau of Statistics, Beijing on large and medium scale industrial enterprises. This database in principle should be comprehensive although changes in definition and misrecording means that some observations have to be omitted and the coverage of the medium and large-scale sector is not fully comprehensive. However this is a large sample and in 2002 the last year for which we have information the sample of enterprises accounted for over 40% of the national industrial value-added. To our knowledge this is the first effort to use this enterprise data to cast light on questions of regional policy.⁹

For the sample enterprises tables 1 [ PDF 87.4KB | 1 page ] and 2 [ PDF 55.9KB | 1 page ] give an indication of the profitability, employment and ownership trends both nationally and in the north-east provinces. To classify enterprises by profitability for simplicity we use profits reported by enterprises themselves relative to assets and group enterprises into three categories;

category 1 profitable (profits/assets > 5%)
category 2 marginally profitable (profits/assets 0 to 5%)
category 3 unprofitable (profits after tax < 0)

In general the picture is mixed with an overall improvement in recorded profitability over the period both nationally and in the region, but with two of the three north-east provinces (Jilin and Liaoning) still having a higher proportion of total assets in lossmaking enterprises in 2002 than the national average. On the other hand Jilin and Heilonjiang in particular have a higher proportion of enterprises in the profitable category than the national average. The picture for Heilonjiang is influenced strongly by the location there of the petroleum sector.

Table 2 [ PDF 55.9KB | 1 page ] illustrates the ownership distribution by employment in the sample distinguishing simply between SOEs, foreign firms (including those firms registered in Hong Kong, China and Taipei,China) and private (including here collective and mixed ownership).

The north-east started the mid-1990s with a higher employment share in the SOE sector. There have been significant employments shifts due to SOE restructuring and privatizations both nationally and in the region, but at the end of the period SOEs still retained roughly two-thirds of employment in medium and large-scale enterprises in Jilin and Heilongjiang. The proportion in Liaoning, at a little over half, is closer to the national average. Conversely the employment share of foreign firms in 2002 is very low in Jilin and Heilongjiang at 3% and 5%, respectively.

In terms of trends over the period 1995-2002 we can measure progress in privatization by the percentage point change in the share of SOEs in both employment and fixed assets. From table 2 we see that in terms of changes in employment nationally the fall for SOEs was 32.5 percentage points; Liaoning with a fall of 31.3 percentage points almost matched the national trend. Jilin and Heilonjiang were behind the national trend with reductions in the employment share for the SOE sector of 21.1 and 25.1 percentage points. However by the criteria of the fall of SOEs in total assets of the medium and large-scale sector, privatization in the region has exceeded or matched the national trend; nationally the fall was 29.8 percentage points, whilst the reduction in the north east provinces was 35.1 percentage points in Lioaning, 29.3 percentage points in Jilin and 41.2 percentage points in Heilongjiang.¹⁰

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