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SOE reform not easy: WB report

By  Wei Tian  (China Daily)

08:23, March 01, 2012

BEIJING - A World Bank report that urged China to speed up reform in State-owned enterprises (SOEs) has met with mixed responses from Chinese experts.

In a report published on Monday, the Washington-based lender suggested further reform of Chinese SOEs, including measures to recalibrate their access to public resources, introduce modern corporate governance, and implement ownership diversification where necessary.

The report also called for bigger support for private sectors to enter monopolized industries, including lowering barriers for entry and exit, as well as encouraging competition in strategic and pillar industries.

SOE reform was the first piece of advice among a series provided by the World Bank, and meant for reference to keep the world's second-largest economy on a path of steady growth over the next two decades.

But the report, authored by the World Bank and the Development Research Center under the State Council, a top think tank for the Chinese government, is likely to face resistance from "vested interest" groups, World Bank president Robert Zoellick told a conference in Beijing on Monday.

"Reforms are not easy, they often generate pushback," he said.

And opposing opinions could not come any sooner and more dramatically, as Du Jianguo, who claimed to be an independent scholar, showed up unexpectedly at a World Bank news conference on Tuesday, disrupting Zoellick's speech and denouncing the World Bank's prescriptions as "poison".

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PD User at 2012-03-01221.127.40.*
At the outset it should be clear in our minds that the purpose of the Chinese Revolution and Reforms and Opening Up, are intended for the improvement of the livelihoods of the WHOLE people, and not just a SECTION. One does not dispute that companies in the private sector are more profitable and run more efficiently than those in the public sector. A person after all cares more about his private lawn than he does about the public green.While the privatization of the SOEs would bring about greater efficiency, all the benefits, including the added products of efficiency, would go to benefit only the few private owners, i.e only a SECTION of the population and not the WHOLE. Such an outcome is obviously NOT what the Chinese revolution originally set out to achieve. There would be great polarization of wealth between the haves and have-nots, like in Capitalist India (the shanty towns of Mumbai and the sea of street sleepers and begging children, trying to survive in an uncaring society). Beware therefore. The WB and their representatives could well be horses sent by the Trojans!

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