By Charlie Zhu and Lucy Hornby
BEIJING, Nov 9 (Reuters) – Bosses of Chinese state-owned
enterprises argued for continued expansion on Friday, defending
themselves against charges that their firms are in urgent need
of reform with claims they are vital to national economic
security while still struggling with the legacy of the planned
economy.
Chinese reformers and Western governments have taken aim at
the state sector in recent years, claiming it gets the lion’s
share of preferential loans and policies. The calls for reform
had built up as factions manoeuvred ahead of a once-in-a-decade
leadership transition.
The critics claim that without further reform of the state
sector, China’s growth will stagnate. They call for equal
opportunity for private firms, which provide most of the new
jobs in China.
In his address to a Communist Party Congress on Thursday,
outgoing Chinese President Hu Jintao called for more investment
in the state sector while also improving its regulation and
diversifying the forms of public ownership.
“The direction of the SOE (state-owned enterprise) reform
should be: SOEs must be more market-oriented and they must keep
strengthening their vitality and influence,” Wang Yong, director
and communist party secretary of the State-owned Assets
Supervision and Administration Commission, told reporters on
Friday.
“Scholars may have different views, but that’s the
development need of the enterprises and the state.”
Indeed, state bosses emphasized their importance to what
they called “national economic security” in their gathering on
Friday, laying out plans for further investment and overseas
expansion.
That came after Hu’s remarks hinted at a further
strengthening of the state in strategic sectors, with the
possibility of more market-oriented competition in other
sectors.
“We should unwaveringly consolidate and develop the public
sector of the economy, allow public ownership to take diverse
forms, deepen the reform of state-owned enterprises, improve the
mechanisms for managing all types of state assets and invest
more state capital in major industries in key fields that
comprise the lifeline of the economy and are vital to national
security,” Hu Jintao told assembled party members on Thursday.
(Editing by Nick Macfie)
