SOEs need support for successful reform
- By Chi Fulin
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E-mail China Daily, April 21, 2016
In general, Chinese people are spending more to get services, and domestic consumption contributed to more than 66 percent of China's economic growth last year. For urban dwellers, it is estimated their spending on services will account for about half of their total consumption by 2020, rising by 2 percent year-on-year since 2014.
To meet their increasing demand for user-friendly services, traditional State-owned manufacturers should put in more efforts to make service-oriented products, such as housekeeping robots, which, in turn, can help expedite the SOE reform during the 13th Five-Year Plan (2016-20) period.
China also has to raise the proportion of the service sector in the country's foreign trade, which is expected to rise from 12.3 percent last year to more than 16 percent in 2020, as well as break the monopoly that exists in the service sector.
It will take time and forward-looking policies to deal with the structural contradictions and challenges facing the SOE reform. The implementation of certain proposals, such as recruiting managers in a professional manner and according to market norms, is of equal importance to the SOE reform.
The Fifth Plenum of the 18th Central Committee of the Communist Party of China last year made clear the central government's ambition to develop a mixed-ownership economy by involving State-owned market players. To break fresh ground in this regard, the SOEs need more financial and institutional support to "go global" following the implementation of the Belt and Road Initiative.
The author is president of the China Institute for Reform and Development in Hainan province.
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