Deep concerns greet China’s rapid economic growth

China’s state-owned enterprise that have benefited from Beijing’s four-trillion yuan stimulus package and the accompanying loose credit policies have encroached on the domain of the country’s private sector.

An investigation by the Economic Observer newspaper this month showed that over the last year a de-facto nationalisation of major private companies has occurred in at least three sectors — coal mines, dairy and steel.

Experts worry that a main engine for growth such as the private sector is now being squeezed out in favour of China’s big state-protected companies.

“It is a real pity that while we keep calling for innovation, our private companies can only rely on stock markets in Hong Kong and New York to realise their dreams for growth,” said Chen Zhiwu, expert on socio-economic policy at Tsinghua University. “China’s own stock markets have for years been the reserved domain of the country’s state-owned enterprises.”

IPS