Time to be more creative for China

Comments on Mei (Lisa) Wang, NERI; Zhen Qi, ANU; and Jijing Zhang "Time for a new look at China’s SOEs", 22/07/2015

It is encouraging that the post has explained the situations of the Chinese State Owned Enterprises (SOEs) and also outlined the new round of reforming measures that will see further change to SOEs including the mixed ownership approach.

The authors argument that "as the SOE reforms evolve, so should the world’s views on them", however, may have ignored a fundamental point associated with the resistances from some western countries. That fundamental point is the ideology of a market economy with dominant private ownership and few government direct involvement in the operations of firms/corporations with government ownership. Another point closely related is the different institutional differences, such as capitalism and democracy on the one hand and communism and authoritative on the other.

When the two points are combined, not only the governments but also the public in those countries may have significant concerns that may oppose or may develop into opposition to Chinese SOEs' Overseas Direct Investments (ODI). Further, China is very big and the scale is huge that itself can be very daunting in the eyes of other nations.

Those few elements add up to natural concerns. That means it is fairly easy to instill general and/or nationalistic fears by some including politicians in western democracies.

To ally the concerns and fears, China probably needs to be more creative in its approach to SOEs and its national assets.