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SOEs can't distort global market competition

China Daily | Updated: 2018-10-10 07:51

Editor's note: At the closing day of the B20 Summit on Oct 5, the organization submitted a document on its conclusions and recommendations for the G20 ahead of its summit next month. The document was criticized by the China Council for the Promotion of International Trade (CCPIT) and the B20 China Business Council for ignoring Chinese concerns and proposals and for its assertion that China's State-owned enterprises create an uneven playing field for market competition. Two experts shared their views with China Daily's Yao Yuxin. Excerpts follow:

Role of SOEs in global economy is overstated

Liu Yingqiu, director of the Center for Private Economic Studies at the Chinese Academy of Social Sciences

Both the State Council and the People's Bank of China have introduced some new policies to ensure fair competition and equal access to financing in the market recently.

After 40 years of reform and opening-up, China highly values the development of the private sector and protection of property rights has already been written into its Constitution and laws. However, how to implement the policy to support the private economy lies in various departments and local authorities.

But not all SOEs enjoy preferential treatment in China, instead, as most countries do, protections are usually given to some certain areas, for example, to ensure national security.

In addition, it is Chinese private firms not SOEs that play the major role in international trade and investment. Therefore, it doesn't make sense to accuse SOEs of distorting the global market competition.

And it should be pointed out that many developed countries already have advanced productivity and technology, and the international competition that they deem fair is actually unfair to developing countries such as China in some fields and puts them at a disadvantage.

However, with China's economy facing downward pressure, reflection is needed on how to optimize the distribution of resources and ensure fair competition in the market, or the country's innovation and economic vitality may be discouraged.

The Chinese government should take note of the concerns expressed by global community about the country's SOEs. But the role of China's SOEs in the international economic landscape should not be overstated.

SOEs are what they are, no need to keep explaining

Mei Xinyu, a researcher at the Chinese Academy of International Trade and Economic Cooperation

Different countries have different economies. It's quite unpractical for global organizations to monitor a state's micro economic activities.

Some international economic organizations are now falling into a trap over making trade rules based on the demands of the developed countries.

Such a practice seeks to incorporate more and more businesses, so it will take a long time and finally lead nowhere.

We don't need to repeatedly explain ourselves or satisfy the desire of the United States and other Western countries to rewrite the trade rules to suit themselves. Time will tell the worth of the SOEs and the country itself will make adjustments accordingly.

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