President Jiang Zemin has ordered state-owned enterprises to speed up reforms and take bolder steps to revitalise themselves.
He said nothing could be achieved if state firms dragged their heels.
'Waiting will get us nowhere. Avoiding the problem and flinching from going forward can only result in attempting nothing and accomplishing nothing,' he told officials and entrepreneurs during an inspection tour of Shanghai.
The President warned that the reform and growth of state-owned firms was not only an important economic issue but also a 'major political question that has a bearing on the fate of socialism'.
Mr Jiang spent nine days touring the coastal region and inspecting state-owned enterprises.
He held a meeting with managers from eight factories in Sichuan, Hebei, Liaoning, Shandong and Shanghai during his stay.
Governors from Jiangsu, Zhejiang and Shandong, as well as the Mayor of Shanghai, were summoned to report on the situation of state firms in their regions.
