Insolvent institutions

Officially in 1992, one third of all large and medium-sized state enterprises in China in 1992 were losing money and many economists placed the real figure at near two thirds. With the private and collective sectors flourishing, reform of the state sector is seen as the central task of the economic reform campaign. Bankruptcies are being increasingly used as a tool, and radical reformers want a lot more. 10 million of the 100 million employees of state enterprise are redundant and must be laid off. An example cited of sensitive handling of redundancy was to promote all the workforce a few days before the closure so that they would start a new job at a high grade.