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China is stepping up its efforts to overhaul township enterprises for the impending challenges brought by China's entry into WTO and the economic globalization, according to a nationwide symposium held recently in central China's Henan province.

The government will focus on the overall distribution of industries, optimization of products, and reform on ownership, as prescribed by a long-term plan promulgated by the Ministry of Agriculture.

China's vigorous township enterprises have grown fast due to cheap labor resource, flexible mechanisms, and government's favorable policies in the past two decades. Their performance has greatly changed the country's rural economic structure, and has become a strong force in the nation's economic development.

However, the advantages are fading away gradually and quite a lot of enterprises run by farmers have not done very well.

Experts said at the symposium that the development of township enterprises is limited by poor product quality, outmoded technology, serious pollution problem, difficulty in getting loans, unnecessary charges, and growing restrictions by some countries on Chinese exports.

In accordance with China's industrial and environmental protection policies, a large number of small township steel mills, coal mines, paper mills, and cement plants are being shut down. Many rural enterprises are still not able to compete with state-owned enterprises on an equal footing. So it is important for the government to give them more support.

This year, the government's expansionary fiscal policy and drive to develop the west have given a great impetus to the rural enterprises.

The revenue of rural enterprises in the first half of this year hit 4.357 trillion yuan (US$531 billion), up 12.6 percent from the same period of last year. The profit hit 272 billion yuan (US$33 billion), up 14.7 percent.

Despite the increment, experts and officials still suggest that rural businesses should develop more high-tech and environment-friendly industries to cope with current difficulties.

Experts added that it is more important to upgrade substandard equipment and train or employ more qualified people for these enterprises.

China's township enterprises mushroomed after the state introduced reforms in the countryside in the late 1970s. They cover a full range of production and services, including manufacturing, transportation, processing, commercial and other service trades.