From Chinese Press
China's oversized state monopolies threaten its economy
(People's Daily Online)
Updated: 2010-06-03 10:18
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When the Financial Times released its list of the 500 largest companies in terms of market value with, it exposed serious problems in the structure of China's economy and China's enterprises. Among the top 500 enterprises, 21 of them are listed on the Chinese mainland and all of them are large state-owned or state-controlled enterprises, covering areas from finance, chemical, construction, to transport and so on. PetroChina Co., China's largest oil producer, took the top spot.
The list caused concern among Chinese netizens and many of them believe it was nothing to be proud about.
Is it good or not that all the Chinese enterprises on the top 500 enterprises are state-owned or state-controlled? With the high concentration of social resources and funds, they are getting larger and larger and increasingly monopolized. PetroChina and Sinopec, for example, have no competitors and are becoming less and less energetic due to a long-term monopoly operation. They run a business without loss and even rob from consumers.
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A country's economic vitality lies in the development environment and speed of private enterprises. It also requires dynamic and internal power of private capital investment
After the worldwide financial crisis, U.S. President Barack Obama said many times during his speeches that the country must address the issue of financial enterprises and other industries that are "too large to fail," which shows the U.S. government felt concerned about the full marketization and privatization of enterprises.
If problems occurring within an enterprise or an industry can lead to problems for the economy as a whole, such as employment, economic growth and state revenue, it spells trouble for the nation. The whole country can be "kidnapped" by these enterprises and industries.
The problems of U.S. financial enterprises triggered the global financial crisis, leading the U.S. economy into a freefall and thousands of people lost jobs ever day. So, these businesses are not so much an asset as they are a threat. However, China still should learn from U.S. anti-monopoly moves. Antitrust investigations against Microsoft and Apple are both good examples.
In the United States, enterprises are making continual innovation and the government is implementing constant oversight, which helps the U.S. economy maintain vitality, competitiveness and order. China should learn from this.
Chinese private firms, growing in an environment of market competition, are more comparable with their counterparts in Europe and the United States. Only when those enterprises with no privileges, monopoly and state holdings are among the global 500 list, can China feel proud.