China unveils details of state-firm reform
China unveiled details on Sunday of how it would restructure its mammoth state enterprise sector, including partial privatization, as data pointed to a cooling in the world’s second-largest economy.
The guidelines, jointly issued by the Communist Party’s Central Committee and the State Council, China’s cabinet, included plans to clean up and integrate some state firms, the official Xinhua news agency said. It did not elaborate.
Reform of underperforming state-owned enterprises (SOEs) is one of China’s most pressing needs. But if not handled well, the restructuring could lead to hundreds of thousands of people being laid off and social instability.
Xinhua said the plans included introducing “mixed ownership” by bringing in private investment, and “decisive results” were expected by 2020.
The government will not force “mixed ownership”, nor will it set a timetable, giving each firm the go-ahead only when conditions are mature, it said.
“This reform will be positive for improving the impetus of the economy and making growth more sustainable,” said Xu Hongcai, director of the economic research department at the China Centre for International Economic Exchanges (CCIEE), a Beijing-based think-think. Read more