China's state-owned enterprises were told to tackle the challenges brought by the world financial crisis but protect employment.

China's state-owned enterprises (SOEs) were told to tackle the challenges brought by the world financial crisis but protect employment, China Business News reported.

Li Rongrong, minister of the State-owned Assets Supervision and Administration Commission (SASAC), urged China's SOEs to cut costs and enhance efficiency to face the "harsh winter," at a working conference attended by leaders of 143 SOEs on Monday.

Li warned SOEs to be fully prepared for 2009, describing it as "the most difficult year for China's economy in the new century."

He asked SOE's not to cut jobs but suggested managerial levels can cut salaries when necessary.

According to statistics published by the National Development and Reform Commission (NDRC), China's SOEs saw a profit of 683 billion yuan in the first 11 months of the year, a 26 percent drop compared to the same period last year.

It is likely a full-year loss will occur this year, Li said, ending a profit growth record of five consecutive years.

Li noted the current situation entangling China's SOEs is marked by a slowing production growth rate, smaller margin and shortage of cash.

However, Li also pointed out that about half of China's SOEs are still making profits under the current circumstances.

(Xinhua News Agency December 16, 2008)