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China approves plan to boost prominence of state firms, despite complaints from trade partners
- China has rolled out a three-year plan to boost the standing of state firms, despite complaints from trade partners these companies have unfair advantages
- Analysts say the initiative is unlikely to significantly improve efficiency among the China’s 130,000 state-owned companies
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President Xi Jinping has approved a three-year plan to enhance the role of state-owned enterprises (SOEs) in China’s economy as it faces fallout from the coronavirus pandemic and the threat of decoupling from the United States.
The SOE action plan for 2020-22 was endorsed by the Central Comprehensively Deepening Reforms Commission, an agency headed by Xi, late last month.
Though details have not been published, its approval sends a clear signal that China’s ruling Communist Party has no plans to drop its support for the state sector, despite long-standing complaints from the United States, the European Union and Japan about unfair treatment of privately-owned multinationals.
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The standing of China’s SOEs has been elevated during the coronavirus outbreak due to their reliability helping contain the virus, providing emergency supplies and ensuring smooth operation of utilities.
05:02
Coronavirus backlash further fraying China’s ties to global economy
Coronavirus backlash further fraying China’s ties to global economy
The meeting chaired by Xi on June 30 concluded that “the next three years will be a critical period for China’s SOE reform, and we must enhance the party’s comprehensive leadership over SOEs … and stick to the concept of a socialist market economy,” reported the official Xinhua news agency last week.
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