Chinese President Xi Jinping’s show of support for state-owned firms ‘no surprise’, analysts say
But it did little to ease trade tensions on world stage, president of European Chamber of Commerce in China says
Chinese President Xi Jinping’s show of support for the country’s state-owned enterprises (SOEs) this week should not have come as a surprise, analysts said on Friday, though the head of a group representing European firms in China said it had done little to ease trade tensions.
According to a report published late on Thursday by Xinhua, Xi said on a visit to Liaoyang Petrochemical, a subsidiary of the state-owned oil giant China National Petroleum Corp, that SOEs “should continue to become stronger, better and larger” and that suggestions they should be diminished were “wrong and one-sided”.
He was speaking after the United States Trade Representative on Tuesday issued a joint statement following a meeting of trade ministers from the US, Japan and the European Union in which they said they opposed “non-market” trade practices of third-party countries.
Although the statement did not mention China by name, the ministers expressed concern at the practice of some countries to develop SOEs into “national champions and setting them loose in global markets – resulting in distortions that negatively affect farmers, industrial producers, and workers” in the US, EU and Japan.
They also complained of SOEs receiving preferential treatment in the form of low-cost loans from state-owned banks and subsidies, which caused and supported overcapacity.
Despite their concerns, Xu Jianwei, senior China economist at French Bank Natixis, said there was little chance that Beijing would change tack on the issue of state-owned companies.