Tire enterprises will be the focus of the consolidation. At this stage, there are two plans. The State would play a leading role in establishing the company by unifying the assets of related enterprises. The second plan is for the State to support the company s development and encourage it to snowball, and then reorganize the assets of the major tire plants when Zhonglian has accumulated sufficient strength. According to the source, the State Council and State Economic and Trade Commission are studying the reorganization plan.
Insiders propose that the State adopt policies to support the large rubber products group.
Years of considerable investment in technological renovation together with heavy tax burdens have rendered these enterprises unable to repay the principle with interest. They cannot improve their performance until their debts are reduced. Secondly, radial tire plants should undergo technological renovation under the uniform management of the group to promote rational utilization of funds.