CHINA: SOE reforms to create national champions
Restructuring and reform of the state-owned industrial sector is set to continue, because the government wants modern state-owned enterprises that can compete on world markets. However, policy is constrained by the need to maintain employment and government tax revenues.
Our judgement
State industry faces more state owned-enterprise closures and mergers, and a tighter state grip on the public sector. The government will intervene to support state industries, although market forces will decide in the end which survive.
See today's CHINA: SOE reforms to create national champions.