Think competitively

Updated: 2011-11-25 08:08

(China Daily)

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US policymakers should stop blaming others for their problems.

Instead, in the face of a national debt of $15 trillion and a stubbornly high unemployment rate, if they really want to reinvigorate the world's largest economy, they should give the rebirth of China's State-owned enterprises (SOEs) a second thought, as their revitalization is closely related to the ongoing rise of the Chinese economy.

The term "competitive neutrality" has been gaining disproportionate currency among US officials who, explicitly or implicitly, attempt to portray big Chinese companies, most of which are State-owned, as a threat to the competitiveness of American companies and workers.

With this newly coined term, the US government has launched a series of efforts to call for targeted measures against SOEs in international trade and investment negotiations.

"It is not up to the US to question the wisdom of other nations in establishing state enterprises. But it is very much a US concern if the playing field is not level between them and their American competitors," US Under Secretary of State Robert Hormats said earlier this year.

Though there is no evidence to show that all SOEs have the opportunities or incentives to engage in anti-competition, the US' concern about SOEs reveals not only its declining confidence in its own companies, but also a strong bias against state involvement in the national economy.

However, given that in Fortune magazine's 2011 list of the 500 largest companies, the United States still leads with 133 while China ranked third with 61, fear over lost US leadership in the business world seems largely exaggerated.

Although competition among private firms is the norm for the US economy, there has been an observable trend in other countries in recent decades for reforms aimed at making SOEs more fully corporatized and commercially driven, considerably improving their overall efficiency.

Besides, the massive bailout of a number of large US banks and auto giants with taxpayers' money in 2008 should be enough to show that the government is part of the solution not the problem.

When talking about competitiveness, Chinese companies still have a lot to learn from their US counterparts, many of which are champions of innovation, globalization and adaptation.

Nevertheless, when examining the government's role in boosting the overall competitive advantages of the national economy, US policymakers can draw some lessons from the Chinese government's painful efforts to revamp SOEs, which transformed them from bankrupt entities in the 1990s, to the backbone of the world's fastest growing major economy.

Blaming Chinese competitors will not help fix the US' economic woes. That will only be achieved if US policymakers make the difficult choices necessary to remedy the problems. And that capability is crucial to national competitiveness.

(China Daily 11/25/2011 page8)