China Giving Its Businesses a Freer Hand : Commerce: The added autonomy includes the right to engage in foreign trade. Firms are expected to be able to react quicker to market conditions.

Chinese businesses have been given greater autonomy, including the right to engage in foreign trade, under a new regulation.

The new regulation is expected to enable enterprises to improve economic performance and respond better to market conditions, the official Xinhua News Agency reported.

China has experimented with granting more decision-making power to enterprises since the 1980s. But the reforms suffered setbacks during periods of political conservatism, such as the three years since the 1989 military crackdown on the Tian An Men Square democracy movement.

But senior leader Deng Xiaoping early this year ushered in a new wave of reform with his calls for bold experimentation in economic development.

The regulation grants all Chinese firms “full operational autonomy” in 14 areas, including imports and exports, investment, labor, employment, pricing, marketing and the right to reject any apportionment of manpower, funds and materials, Xinhua said.

Specifically, it allows firms to participate in negotiations with foreign counterparts and provide labor for contracted and technical cooperation projects overseas.

The regulation also allows enterprises to alter production, cease or merge operations, and even to declare bankruptcy, Xinhua said.

The report called the enactment of the regulation “a major event in the industrial reform effort and in economic restructuring as a whole.”