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Defusing Debt Bombs: Behind the Mixed Reform of China’s State Enterprises

Defusing Debt Bombs: Behind the Mixed Reform of China’s State Enterprises
Chinese police walk in a line passed buildings demolished by authorities in an area that used to have migrant housing and factories in the Daxing District of Beijing, China on Dec. 6, 2017. Kevin Frayer/Getty Images
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As of now, the Chinese Communist Party (CCP) regime has introduced three mixed-ownership reforms (mixed reforms) across 50 experimental state-owned enterprises — termed the second round of public-private partnerships. The 19 experimental companies involved in the first two reforms were directly led by the central government, but the third time was different, as it mainly directed at locally run state-owned enterprises (SOEs). In this reform, private businesses actively sought to merge with the state, and the SOEs received them with open arms.
For both the state and private sectors, the motivation in the new round of public-private partnerships has less to do with its official description of “improving the governance structure and management level of enterprises” and everything to do with the pressures of growing debt.
He Qinglian
He Qinglian
Author
He Qinglian is a prominent Chinese author and economist. Currently based in the United States, she authored “China’s Pitfalls,” which concerns corruption in China’s economic reform of the 1990s, and “The Fog of Censorship: Media Control in China,” which addresses the manipulation and restriction of the press. She regularly writes on contemporary Chinese social and economic issues.