Here we go again. This is an excerpt from IMF’s 2015 article IV consultation with China.
Directors underscored that further structural reforms are needed to make the Chinese economy more open and market-based and promote further internal rebalancing. These include moving to a more market-based financial system and monetary policy framework, including completing interest rate liberalization and eliminating implicit guarantees; reforming state-owned enterprises; moving to an effectively floating exchange rate; and strengthening the fiscal framework, including local-central government relations, the social security system, and tax policy. They noted that these reforms are in the authorities’ agenda and welcomed the steps that have been taken. Looking ahead, they urged steadfast and timely implementation of the envisaged reforms.
According to The Brics Post dated 14th September 2015 President Xi Jinping has announced reforms for China’s State Owned Enterprises (SOE). This means: Private investors will be encouraged to buy stakes in state firms. SOE boards of directors will have greater decision-making powers, executives will be more tightly supervised, and intervention by government agencies will be forbidden under the new guideline.
The story also suggests that SOE’s make competition unfair. Unfair to who? Unfair to the ordinary person who has to pay higher prices through privatisation of SOE’s and via job cut backs so they can be more efficient. More efficiency is good (good for corporations to make more money). Looks like the big corporations are trying to tell China what to do, hence the reason why Brics was started. Let’s see if China gets these reforms in place before they become the reserve currency of the world and are a major borrower of currency for world trade.
Once again who or what runs the world??