Nominal: Intercepting Zhong Xiaoai, Dominating Handong

"If all else fails, shut down what needs to be shut down, and let those that need to go bankrupt go bankrupt."

Zhao Zhigang put down the outline and looked at Gu Mingyuan: "Comrade Mingyuan, your idea is very good."

"But you must understand that the reform of state-owned enterprises has far-reaching consequences."

"What about employee resettlement? How will bank debts be handled? How will social stability be guaranteed?"

"If these problems are not resolved, reforms cannot be carried out."

"Mayor Zhao is right. So I think reforms shouldn't be rushed; we need to start with pilot programs. We should select a few different types of enterprises to conduct pilot reforms. If they succeed, we can promote them; if they fail, we can learn from the lessons." Gu Mingyuan was prepared for this.

Zhao Zhigang pondered for a long time: "Okay, then, refine this idea further and form a complete plan. There will be an industrial meeting next Monday, and you can present it."

"yes!"

In the following days, Gu Mingyuan secluded himself and devoted himself to perfecting the reform plan.

Drawing on experiences from other regions and combining them with the realities of Pingzhou, he proposed an overall approach of categorized reform, pilot projects first, and steady progress.

The plan divides all state-owned enterprises in the city into four categories:

One type is leading companies, such as Pingyao and Pingdian, which have grown stronger by introducing strategic investors and raising funds through listing.

The second category consists of general enterprises, such as Pingji and Pingfang, which revitalize themselves through restructuring, reorganization, and employee stock ownership.

The third category consists of struggling enterprises, such as Pinggang and Pinghua, which revitalize their existing assets through asset restructuring and debt reorganization.

The fourth category consists of zombie companies that are truly beyond saving and will be subject to bankruptcy liquidation in accordance with the law.

The plan also includes detailed supporting measures for employee resettlement, debt handling, and asset disposal, striving for stability and feasibility.

At Monday's industrial conference, Gu Mingyuan's report sparked a heated discussion.

"Employee stock ownership? Wouldn't that be privatization?"

"Bankruptcy liquidation? What about the unemployed workers? What about social stability?"

"Won't introducing foreign investment lead to the loss of state-owned assets?"

Questions and criticisms arose one after another.

Gu Mingyuan remained calm and responded to each question one by one:

"Employee stock ownership is not privatization, but rather the establishment of a community of shared interests between the company and its employees."

"When employees become shareholders, they will naturally care about the company's performance."

"Bankruptcy liquidation is a last resort, provided that the employees are properly resettled."

"We can establish re-employment service centers to provide training and help employees transition to new jobs."

"The introduction of strategic investors follows strict procedures and regulations, and will not lead to the loss of state-owned assets."

"On the contrary, by diversifying shareholding, we can improve corporate governance and enhance the efficiency of state-owned capital."

His answer was reasonable and well-founded, gradually dispelling everyone's doubts.

Zhao Zhigang concluded: "Comrade Mingyuan's plan has a clear approach and pragmatic measures."

"State-owned enterprise reform is an inevitable trend; there is no way out without it."

"But this is a very big matter and requires a collective decision by the municipal party committee and the municipal government."

After the meeting, Zhao Zhigang said to Gu Mingyuan, "Mingyuan, please refine the plan further, especially the risk prevention and control section. I suggest we submit this proposal to the Municipal Party Committee Standing Committee next week."

"Yes! Thank you for your support, Mayor Zhao!"

Gu Mingyuan knew that the real test had only just begun.

On March 25, the Standing Committee of the Pingzhou Municipal Party Committee held a special meeting to study the reform of state-owned enterprises.

At the meeting, Vice Mayor Zhao Zhigang gave the main report, and Gu Mingyuan, as the main drafter of the plan, attended the meeting and provided supplementary explanations.

When Gu Mingyuan said, "We must be bold enough to take action against zombie companies and let those that should go bankrupt go bankrupt," a member of the Standing Committee frowned.

"Comrade Mingyuan, isn't your proposal a bit too radical?"

"The bankruptcy of a state-owned enterprise is unprecedented in Pingzhou. Will it cause social instability?"

Gu Mingyuan was prepared: "Secretary Wang, I understand your concerns."

"But we must recognize that some companies are already insolvent and are relying on government bailouts to stay afloat. This not only fails to save them but also drags down the entire economy."

"A short, sharp pain is worse than a long, drawn-out one. Rather than letting them slowly wither away, it's better to go bankrupt according to the law and revitalize existing assets."

He presented some data: "Taking Pingzhou Chemical Plant as an example, it lost 30 million yuan last year, had a debt of 520 million yuan, and an asset-liability ratio of 187%."

"Is there any point in saving a company like this?"

"But its land and equipment are high-quality assets. After bankruptcy reorganization, new projects can be introduced to achieve industrial upgrading."

"What about the resettlement of employees?" another member of the Standing Committee asked.

"The plan contains detailed designs."

"First, we will establish re-employment service centers to provide basic living support and re-employment training."

"Second, we encourage new companies to give priority to hiring employees from existing companies."

"Third, those who are less than five years away from retirement age will be subject to internal retirement."

"In short, no employee should be left without basic living security."

Pei Yihong had been listening quietly until he spoke up: "Comrade Mingyuan, have you calculated how much funding would be needed if we proceed with your plan? Can the municipal finances afford it?"

"Secretary Pei, I've done a preliminary calculation." Gu Mingyuan opened his notebook.

"The costs of reform mainly include three parts: employee resettlement costs, debt settlement costs, and reform implementation costs."

"If it is completed in three years, it will require 150 to 200 million yuan each year."

"This part of the funding can be raised through methods such as the transfer of state-owned equity and the revitalization of land assets, and the fiscal pressure is manageable."

"More importantly, if the reforms are successful, corporate profits will improve, tax revenue will increase, and fiscal pressure will be reduced. This is spending money to buy a mechanism and to buy the future."

The room fell silent.

The Standing Committee members are all digesting this bold proposal.

Pei Yihong looked around and said, "Let's all speak up. State-owned enterprise reform is an inevitable trend. The sooner we reform, the more proactive we are; the later we reform, the more passive we become."

"Comrade Mingyuan's plan, though bold, is supported by data and has supporting measures, so I think it is feasible."

The municipal party secretary set the tone, and other members of the standing committee also expressed their opinions.

"I agree with pilot programs first. Select a few companies to try it out. If it succeeds, it can be promoted; if it fails, there will be room for maneuver."

"The plan needs to be further refined, especially the resettlement of employees, which must be handled prudently."

"I suggest establishing a leading group for state-owned enterprise reform, headed by Secretary Pei himself, to coordinate and promote the reform."

Finally, the meeting reached a resolution: to approve in principle the "Pilot Program for the Reform of State-owned Enterprises in Pingzhou City", to establish a leading group for the reform of state-owned enterprises with Pei Yihong as the group leader, Zhao Zhigang as the executive deputy group leader, and Gu Mingyuan as the director of the leading group office.

Five companies will be selected for the initial pilot program. After six months, the experience will be summarized before a decision is made on whether to roll it out nationwide.

After the meeting, Pei Yihong called Gu Mingyuan to his office.

"Mingyuan, this is a heavy responsibility," Pei Yihong said solemnly.

"Reforming state-owned enterprises is a tough nut to crack; if you don't tackle it properly, you'll break your teeth. Are you confident?"

"Secretary Pei, I have confidence. But I need your support even more," Gu Mingyuan said frankly.

"Plans are rigid, but people are flexible. Unexpected difficulties will arise during implementation, requiring strong support from the municipal party committee and government."

"Don't worry about that," Pei Yihong patted his shoulder.

"Go ahead and do it boldly, I'll take responsibility if anything goes wrong. But there's one condition—the interests of employees must be protected, and social stability must be ensured. This is the bottom line, and it cannot be crossed."

"Yes! I promise!"

As Gu Mingyuan left the municipal party committee building, he felt a heavy burden on his shoulders.