Exclusive | US trade war spreading to China’s state-owned enterprises, warns senior government official
- Deputy head of the State-owned Assets Supervision and Administration Commission, Meng Jianmin, makes comments in private speech at closed-door meeting
- Electricity consumption shrinking in the city of Suzhou and Zhejiang province, an indication of a downturn in economic activity
The trade war with the United States is dealing a heavy blow to China’s private-sector businesses and that impact has started to spread to state-sector firms, a senior Chinese government official has warned in a private speech.
Meng Jianmin, the deputy head of the State-owned Assets Supervision and Administration Commission (SASAC), which supervises China’s state-sector assets, made the comments last week at an internal meeting urging state enterprises to quickly pay invoices for goods and services from private-sector firms to help shore up their finances.
State-owned enterprises owed private companies about 2 trillion yuan (US$290 billion) at the end of September, Meng said in the closed-door meeting, according to a summary of the speech obtained by the South China Morning Post, the contents of which were later confirmed by several people who attended the meeting.
He did stress that only “a small part” of the invoices had become overdue.
Meng also told delegates from state-owned enterprises that they must pay close attention to the problems that private businesses are facing due to China’s trade war with the US and the possible ripple effect those problems could have on their own businesses.
“State-owned enterprises and private businesses are competitors but also partners and comrades-in-arms in the Sino-US trade dispute battle and in developing new overseas markets,” said Meng.