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China’s state firms must become ‘bigger, stronger’ and still be at the core of the nation

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An employee walks past columns of steel at a steel production factory in Wuhan, Hubei province, China. Photo: Reuters

The mainland’s dilemma about state firms could not have been clearer.

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In an opinion piece in the official People’s Daily on Thursday, Renmin University professor Zhou Xincheng attacked suggestions that state-owned enterprises should be privatised, calling on the authorities to make SOEs “bigger and stronger”.

The article was published on page seven of the ruling Communist Party’s mouthpiece and as such has less weight than an editorial or a front-page interview.

But its publication amid a broader debate on “supply-side” economic reforms highlights the administration’s predicament about state firms – Beijing wants the massive enterprises to be more profitable but is unwilling to loosen its grip on them.

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Official ideology brands China as a socialist country reliant on “public ownership” even though most economic growth and employment is generated in the private sector.

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