China National Radio:

Recently, the Central Bank revealed that, in order to resolve structural problems in the domestic economy, China is considering the treatment of State-owned enterprises on the principle of “competitive neutrality”. Does this mean State-owned enterprises will be exempted from their policy burden, and that all businesses will compete on a level playing field? In addition, how to achieve this kind of competitive neutrality in the future? What changes will this produce in regard to China's economic structural problems? Thank you.

Mao Shengyong:

Your questions are very academic. This point was raised by the Governor of the People's Bank of China Yi Gang only a few days ago. Competitive neutrality, from an academic viewpoint, means that, under the conditions of a market economy, countries treat different types of enterprises equally. We call this kind of technical methodology as the principle of competitive neutrality. In other words, as long as it is a market entity, regardless of its identity, it is treated equally, and enjoys fair treatment in terms of market access and resources. The principle of competitive neutrality can help promote development of the private economy, thus boosting private investment. It is also conducive to the reform and development of State-owned enterprises.

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