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16 December
Monday

Asia

Head of China’s state company says Beijing must to deepen market reforms

The main idea of progress is free competition

Photo: SCMP

/NOVOSTIVL/ The head of China’s largest and oldest state-owned company in Hong Kong has recommended that the government should let competitive forces play a bigger role in certain market-oriented industries. This article appeared in the South China Morning Post.

The government should continue to dominate industries monopolised by state entities, such as power distribution and transmission, whereas industries that are already populated by private enterprises or quasi-state companies should be allowed to compete.

Fu’s comment comes at a critical juncture in China’s economic reforms, when state enterprises and private businesses are locked in a collective soul-searching to stake a claim in the world’s second largest economy. At stake are government resources, access to crucial financing, market access, technology and regulatory barriers.

“Beijing’s attitude [towards state enterprises] is firm and clear: if you lose, we will just let you collapse and go bankrupt. Competition is necessary for state enterprises to reform themselves and become stronger on the global stage.”

Fu also said China will not sink into an economic recession or fall into a middle income trap, as its economic growth is not slow compared to other major economies.

Still, the government needs to fix the regional economic disparity, especially northeast China’s net population outflow, and support western China’s development.

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