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Topic_7_Econ162bw

Topic_7_Econ162bw - The Economy of China Economics 162...

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Economics 162 The Economy of China Topic 7 – State Owned Enterprises Professor David Roland-Holst Department of Agricultural and Resource Economics Tuesday and Thursday, 12:30-2PM, 10 Evans Hall
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Roland-Holst 2 Economics 162 State Firms in Transition The state sector was the “commanding height” of the planned economy The state sector continues to be the “pillar” of the economy Dominates in strategic industries Pays more taxes Gets more bank loans and stock market finance State-owned enterprises are unfortunately the root of the labor and financial sector problems • Cautions: Their roles in the economy have been declining because of the rise of the private sector But they are more significant than some statistics show, for example, most listed companies are controlled by the state
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Roland-Holst 3 Economics 162 Varieties of State Firms: By Level of Control Four levels of government control Central Provincial Municipality County About ¼ of SOEs are directly controlled by the central government, and the rest by local governments (mostly by municipal governments) • Implications Diverse local government policies on SOE reform Local interests may differ from national interests, for example, local protectionism in automobile industry
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