Money Matters | China's SOE merger rumours a smoke screen to hide lack of real reform
Fifteen months after pledging to reform state enterprises, there is no sign of any policy paper and meaningful proposals have been shelved
How true are the rumours that Beijing will merge several mega-sized state enterprises into giants in various strategic industries? The betting is that they are.
It is not that Money Matters has any insider information; nor is it because the mergers make compelling economic sense.
The fact is that when you don't want to or cannot tackle the real thing, a merger will always make enough headlines to show that you are serious about reform.
That applies not only to Fortune 500 chief executives but also China's leaders.
Fifteen months after Communist Party general secretary Xi Jinping pledged to reform state enterprises, there is no sign of any policy paper. His team simply cannot agree on any real reform.
Meaningful proposals have been shelved. Among them are the appointment of general managers by the board instead of the party and the removal of civil service ranks and perks for state-owned enterprise executives to make corporate profits their only concern.