(15 September 2000) Sugar is sweet, but the refinery business is certainly not.

China¡¯s government is taking harsh measures to make up for the poor economic performance of the country¡¯s sugar-processing plants, including closing almost a third of them.

According to the State Economic and Trade Commission), the nation¡¯s sugar refineries have registered huge losses for four consecutive crushing seasons (each season begins in October and ends in June), with accumulated losses of nearly 10 billion renminbi (US$1.21 billion), reported the Sept. 11 Zhongguo Xinxi Bao (China Information News).

The price of sugar in China has doubled during the past few months, which has forced the government to use its reserves to ease the price hike.

The SETC teamed up with State Development Planning Commission, the Ministry of Finance and the central bank, the People¡¯s Bank of China, to conduct a thorough assessment of the sugar sector. Based on their findings, the government decided to force 150 sugar plants¡ªor about 30 percent of the country¡¯s 539 sugar mills¡ªto file for bankruptcy because their losses for the 1998-99 crushing season reached Rmb 1.9 billion (US$229.7 million). These losses also accounted for 86 percent of the sector¡¯s total losses, which stood at Rmb 2.2 billion (US$266 million).

Bad loans made to the 150 plants have now reached Rmb 13 billion (US$1.57 billion), the article said.

In addition, a total of more than 130,000 employees at 132 of the 150 plants are expected to be laid off, which is estimated to cost the government nearly Rmb 2.6 billion (US$314.4 million) in severance pay.