News / Asia

In China, Expectations Growing for Bold Reforms

People watch as police officers check visitors in front of the Great Hall of the People during a gathering of the 205-member Central Committee's third annual plenum in Beijing, China, Nov. 9, 2013.
People watch as police officers check visitors in front of the Great Hall of the People during a gathering of the 205-member Central Committee's third annual plenum in Beijing, China, Nov. 9, 2013.
William Ide
In China, there are signs that the top leaders at a closed-door summit in Beijing are considering major changes for the country's powerful and politically connected state owned enterprises. The state-owned enterprises, or SOEs, dominate large parts of the Chinese economy and have long been viewed by critics as obstacles to reform and private enterprise as well as sources of corruption.

Without getting into specifics, an editorial Monday in the People’s Daily newspaper, a mouthpiece for the Communist Party, spoke about the need to change regardless of the risks or difficulties. It also said that not pushing forward with deeper reforms would bring even more challenges.
 
The official Xinhua news agency says that when the meetings finish Tuesday, reforms will feature breakthroughs in three areas: development and transformation, fairness and justice as well as government and the market.
 
Sun Lijian, an economics professor at Shanghai’s Fudan University, said one of the key challenges after the meeting will be giving the market more say in the economy.
 
“The government should loosen controls, address the relationship between the state and businesses so the market takes the lead in creating wealth.”
 
According to the English version of the state-backed China Daily, after the meetings wrap up, China will take major steps toward reforming the country’s state-owned enterprises and open them up for private investment.
 
The report quotes officials at the State-owned Assets Supervision and Administration Commission, a government body that oversees 112 large state enterprises, as saying that private investors and companies will be allowed to purchase up to a 15 percent stake in state ventures. It was unclear from the report whether each enterprise or investor could take a 15 percent stake or whether the private limit was capped at 15 percent total.

Either way, the signal that reform might also be coming to the country’s state-owned enterprises was a welcome shift. Earlier expectations were that reform of China’s SOEs was not likely to be on the government’s agenda. The heads of some of China’s large state companies - many former party officials - have great influence within the government and among those at the leaders summit in Beijing.
 
Zhang Tianyu, associate director of the school of governance at the University of Hong Kong Business School said the idea seems like a good experiment.

"Fifteen percent, is from zero to 15 already now, I think this is one big first step they are taking to reform the SOEs, so maybe step by step they can take away or increase this limit," Zhang said.
 
He added, however, that if 15 percent is the cap, that would mean that the state or government still holds 85 percent and that means investors would just be putting their money into the company. Zhang said he wonders how many would be brave enough to do that.
 
According to Sun Lijian, broader reforms are needed to help create a more level playing field for private companies.
 
“Those who perform better should get a larger proportion of the resources. In other words, the distribution of resources should not be simply judged by the enterprises’ ability to pay mortgages," Sun said. "When it involves state-owned properties, the banks will grant special treatment to state-owned enterprises. That situation cannot go on any more.”
 
Sun added that that if private enterprises are given more room to compete they could be the biggest benefactors of the government’s latest round of reforms.

You May Like

Turkey's Controversial Reform Bill Giving Investors Jitters

Homeland security reform bill will give police new powers in search, seizure, detention and arrests, while restricting the rights of suspects, their attorneys More

Audio Slideshow In Kenyan Prison, Good Grades Are Path to Freedom

Some inmates who get high marks could see their sentences commuted to non-custodial status More

'Rumble in the Jungle' Turns 40

'The Champ' knocked Foreman out to regain crown he had lost 7 years earlier when US government accused him of draft-dodging and boxing officials revoked his license More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Victorious Secularists Face Challenge to Form Government in Tunisiai
X
Henry Ridgwell
October 30, 2014 11:39 PM
Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Victorious Secularists Face Challenge to Form Government in Tunisia

Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Africa Tells its Story Through Fashion

In Africa, Fashion Week is a riot of colors, shapes, patterns and fabrics - against the backdrop of its ongoing struggle between nature and its fast-growing urban edge. How do these ideas translate into needle and thread? VOA’s Anita Powell visited this year’s Mercedes Benz Fashion Week Africa in Johannesburg to find out.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.

All About America

AppleAndroid