China SOE Reform Gets Off To A Slow Start As Bubble GrowsRupert Hargreaves
One of the biggest stories coming out of China this year has been the reform of the country’s state-owned sector. Amid the slowing growth and declining operating income of state-owned enterprises or SOEs, Chinese policymakers have embarked on an ambitious plan to reform the industry, launching trials to test changes in mergers, salaries, employee shareholding, and corporate restructuring.
Falling profits and lack of competitiveness on the global stage have been the key drivers behind this desire by Chinese policymakers to reform the SOEs. Income is on track to fall 13% this year.