State gets stronger in economy – Arthur Kroeber

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Arthur Kroeber

State-owned companies are getting a stronger grip on the economy, at the expense of private capital, says economist Arthur Kroeber, author of China’s Economy: What Everyone Needs to Know®, at the New York Times. The major investment of major tech firm in China Unicom was just the latest move.

The New York Times:

A number of state-owned companies, including big players in the energy and railroad industries, have also said in filings this year that Communist Party committees will play a major role in corporate leadership. The new language essentially formalizes — and underscores — what most investors and executives already assumed to be the case.

“It seems for the last two-and-a-half years the tide has been moving toward state capital at the expense of private capital,” said Arthur Kroeber, a partner at Gavekal, a research firm. “That’s not very encouraging.”

Still, China Unicom’s deal has the potential to be different because some successful private companies are involved, Mr. Kroeber said.

“This can be fairly interpreted as a signal that there’s a fairly serious effort to restart this mixed ownership reform in more or less the format that was originally planned,” he said.

More at the New York Times.

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