From Chinese Press

Real industrial reform needed

(China Daily)
Updated: 2010-06-03 08:22

China has been undergoing market-oriented reform for more than 30 years. But genuine market principles have not yet be established. In the long run, government monopoly in certain sectors should be broken to create a level playing field for all enterprises and give them institutional guarantee to raise their employees' income, says an article in Shanghai Morning Post. Excerpts:

The National Development and Reform Commission, China's top planning body, recently put forward a plan to adjust the national income allocation pattern and increase the proportion of citizens' income, highlighting an important fact: State-owned enterprises (SOEs), especially the ones that enjoy monopoly, are badly in need of a wage reform.

The widening income gap among people working for different industries may have caused public discontent, but the monopoly that SOEs enjoy in certain sectors has a far-reaching negative influence on the national economy. The reason why competitive industries see little profit growth is that monopoly SOEs keep investment opportunities under control and limit the investment channels for private capital.

To adjust wages paid by monopoly industries is only a response to people's resentful sentiments on the their extremely high income. It cannot alleviate the plight of competitive industries, which cannot transform or upgrade themselves because of SOEs' monopoly.

(China Daily 06/03/2010 page9)