Reforms should mean growth: China state cos

Nov 09 2012, 17:51 IST
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SummaryChina's big state-owned enterprises (public sector companies) argued for continued expansion on Friday, echoing outgoing President Hu Jintao's comments urging more investment in major government firms and curtailing hopes of reform in the bloated sector.

under immediate pressure to break the grip of inefficient SOEs and reinvigorate China's three-decade-long economic miracle.

But he will have to deal with the divisions within the party on policy.

Critics claim that without further reform of the state sector, China's growth will stagnate. They call for equal opportunity for private firms, which provide most of the new jobs in China.

On Friday, data for October showed the economy was pulling away from its slowest growth in three years. Analysts said that thanks to a raft of pro-growth policies rolled out by the government in recent months.

Wang, the state assets commission chief, admitted that the enterprises were saddled by a bloated workforce, a legacy of the planned economy.

But he and other state-firm bosses emphasised their importance to what they called national economic security in their gathering, laying out plans for further investment and overseas expansion.

The large state role prompted a U.S. congressional advisory panel to complain this week that Chinese investment in the United States had created a potential Trojan horse.

The study, commissioned by U.S.-China Economic and Security Review Commission, found that Chinese-owned firms in the United States added between 10,000 and 20,000 workers in the past five years and helped shore up financially troubled U.S. firms.

The investment was spearheaded by Chinese state-owned enterprises that enjoyed government subsidies and other market-distorting policies that support industrial policy and non-market goals of the Chinese government, it said.

Based on this juxtaposition, some will conclude that Chinese FDI (foreign direct investment) in the United States is a potential Trojan horse, the report concluded.

Chinese telecoms firm Huawei Technologies, the world's second-biggest telecoms equipment maker - and another telecommunications firm called ZTE - spent much of this year under siege by U.S. lawmakers who suspect Huawei has close ties to Beijing and that its equipment could be used for espionage.

The telcos are not state-owned enterprises. Huawei is owned by its employees and ZTE by different institutions.

The party congress ends on Wednesday, after which the new Standing Committee, at the apex of power, will be unveiled.

Only Xi and his deputy, Li Keqiang, are certain to be on what is likely to be a seven-member committee, and about eight other candidates are vying for the other places.

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