Harada 16 nikkei staff writer issaku zombie companies

Harada 16
– Nikkei staff writer (Issaku, “Zombie companies still roam free in china’s hinterlands”, NIKKEI
ASIAN REVIEW, 7-16-16, -
China-s-hinterlands)//SL
BEIJING -- As President Xi Jinping spearheads a drive to cut industrial capacity and cull money-losing "zombie"
corporations,
a closer look at Chinese coal country raises doubts as to whether
his proposed reforms will ever take root
.
Shuttered mines litter the landscape around the city of Linfen in Shanxi Province. A 58-year-old worker at a state
coal-processing company said his monthly salary of just over 3,000 yuan ($448) started arriving a month late in
March. This was the first time something like this had happened in his 10-plus years there. His nephew is waiting
for the coal waste disposal plant where he works to resume operations.
"There are no jobs, so all the young people have gone to work in Beijing and other places unless their families are
rich," the worker said.
Little activity can be seen at a steel and coking coal plant so large that
buses run across its grounds.
The local government has been gradually shutting facilities down
since around 2013 for environmental and other reasons.
The plant employed
roughly
30,000 at its peak, but only a third as many
remain
today
. It now makes only steel sheet and a handful of other products whose prices have recovered. About 7,000
employees wait at home for work on a monthly stipend of about 1,000 yuan.
"Did you also come to collect debt?" a man asked while approaching this reporter. The 30-year-old's Jiangsu
Province company had a long business partnership with the plant but had yet to be paid 2 million yuan in
receivables.
"Our parent company won't even let us go bankrupt," he said. "We are the epitome of a zombie company, just
trudging along under current conditions."
Reform plans
laid out by Beijing in December
stress the need to restructure zombie
companies
in order to minimize the number of bankruptcies. But
as long as employers and
employees
alike
remain in limbo, the ruling Communist Party will get nowhere
in its efforts to prevent a rise in joblessness and social unrest.

Xt – Reforms Fail
New Reform can’t solve Brexit shocks
Pesek 16
– awarded the 2010 Society of American Business Editors and Writers prize for commentary
(William, “Why Brexit Is a Wake-Up Call for China”, BARRON’s, 6-29-16, -
brexit-is-a-wakeup-call-for-china-1467163893)//SL
Should turmoil continue to hit world markets, China will find what worked
eight years ago won’t as 2016 unfolds
.
It’s
simply
reached the limits of what
can be achieved with stimulus
, conventional or otherwise. Here’s an even bigger concern: that Li
and his boss President Xi Jinping continue to punt much-needed economic upgrades forward, just as Wen’s
government did from 2003 to 2013.