This article, written by Hou Yunchun, deputy secretary-general of the State Economic and Trade Commission, is about what he has gained from studying the Decision of the Fourth Plenary Session. Following are excerpts of the article:

The Decision of the CPC Central Committee on Some Major Issues Concerning the Reform and Development of State-Owned Enterprises, adopted by the Fourth Plenary Session of the 15th Central Committee of the Communist Party of China (CPC), regards the "comprehensive strengthening and improvement of enterprise management" as an important guideline for the reform and development of State-owned enterprises (SOEs) and makes a special emphasis and exposition on this, it points out that intensifying enterprise management and raising the scientific management level is an inherent requirement for the establishment of a modern enterprise system, as well as an important way for SOEs to turn deficit into profit and improve their competitiveness. It calls for high attention to and earnest strengthening of the enterprise management work, strict management of enterprises, realization of management innovation and quickly changing the situation of random decision-making, the lack of a strict system, lax discipline and low management level existing in quite a few enterprises. The Decision also sets forth specific requirements in some important aspects concerning the strengthening and improvement of enterprise management. Conscientious implementation of the spirit of the Decision and comprehensive strengthening and improvement of enterprise management are of most important significance in pushing the reform and development of SOEs and enhancing their efficiency and competitiveness.

Since the launch of the reform and opening program, we have made active and arduous exploration, done a great deal of work and scored tremendous achievements in regard to how to meet the requirements of the new situation and strengthen and improve the enterprise management work. While fully affirming the achievements China has gained in enterprise management since the start of reform and opening, we should all the more see the existing outstanding problems and shortcomings. The problem arising from the present situation in which enterprise management fails to satisfy the requirement for the socialist market economic development is very conspicuous. First is the backward operational concept, the idea of "waiting for, depending on and asking for" help from the higher level is seriously existing in quite a number of enterprises which are not really oriented toward the market. Second is the existence of large amounts of such phenomena as lax management, weak foundation work, incomplete rules and regulations, the lack of regulations to follow, the failure to observe regulations and the failure to take action against violators. Third is the serious phenomenon of the practice of fraud.

To strengthen and improve enterprise management under the new situation, it is necessary to do a lot of work. In light of the current outstanding problems generally existing in the management of SOEs, the Decision lays special emphasis on the following four aspects.

(I) Strengthening study and management of enterprise development strategy. Regarding enterprise management under the condition of a market economy, strategic management is the most important management. On the basis of its scientific analysis and forecasting of the market, the situation regarding its rival competitors, the trend of technological development and the basic conditions of the enterprise itself, the enterprise should rationally formulate and implement clearly defined development strategy, technology innovation strategy and market sales strategy and conduct timely readjustments in light of the constant market change.

Along with the increasingly fierce market competition, there are mounting factors of uncertainty, enterprises must pay attention to and strengthen risk management. They should dare to take risks, do pioneering work, seize market opportunities and try hard to avoid risks, disperse risks, reduce the losses brought by risk to the minimum and win the largest possible repayment.

(II) Perfecting and improving various rules and regulations, and intensify basic work. The key to enterprise management is to have rules to follow, to act in accordance with regulations and manage the enterprise in a strict manner. The market economy is a legal economy, the enterprise must act according to law whether in terms of internal management or of external operation, and know, understand, observe and use law.

(III) Vigorously grasp the weak links of management, with the emphasis placed on the proper management of cost, fund and quality. Under the market economy, the enterprise's asset and liability statement, the profit and loss statement and the cash flow statement are most capable of reflecting the production and operation situation and management level of the enterprise. China's low quality and management level is directly related to the adoption of low and irregular management and technological standards, it is necessary to strengthen standardized management and actively implement the GB/IS09000 series of standards. Along with the development of the market economy and increase in foreign economic ties, the question of paying attention to the management, protection and rational use of the enterprise's intangible assets has been placed on the agenda of enterprise management. Chaos in enterprise management is often linked together with various corrupt phenomena, so it is imperative to integrate enhanced management with combating corruption and promoting clean and honest government.

(IV) Extensively adopt modern management techniques, ways and means, learn from and draw on advanced experience. It is essential to conscientiously popularize the many good management experiences created by Handan Iron and Steel Company and other advanced enterprises in their entry into the market; and to earnestly learn from the modern management methods of foreign enterprises. How to go with the new tide of international enterprise management and, in compliance with the requirement of the market economy, rationally set up enterprise's internal structures, and change the situation of unwieldy management organizations and excessive managerial personnel is an important question that calls for great effort for its solution in the management of State-owned enterprises.

Many enterprise management experts have said with certainty that management is likened to a gold mine. For the overwhelming majority of China's State-owned enterprises, management is all the more a gold mine yet to be exploited and containing enormous potential. Arresting efficiency from management should become an important point calling for major efforts for the reform and development of State-owned enterprises.