Can China achieve Xi Jinping’s vision of becoming a “moderately prosperous society” if the world’s second largest economy continues to be dominated by state-owned, state-run companies?
Not by conventional models of markets and economic growth. Job security and self-dealing in China’s state-owned enterprises have been known to override what markets value more: innovation, risk-taking and reinvention.
President Xi’s 19th Party Congress two weeks ago called for stronger, bigger state companies along with more support for private firms. That may sound like a dead-end contradiction to capitalists in the West. But it prompts an intriguing question: can China’s state-owned enterprises become more efficient and profitable within China’s government-controlled economy?