July 25, 2015
– SHANGHAI – China plans to introduce fair competition reviews into its industrial policy process, the official Xinhua news service reported on July 25, 2015, quoting State Administration for Industry and Commerce head Zhang Mao.
The move will create a more open and transparent regulatory environment for the market, Zhang said, adding that the reform will help reduce interventions by the government that created “unfair competition.”
China is trying to upgrade its industrial base and push its companies up the value chain. At present many Chinese firms suffer from narrow profit margins that are lower than their cost of capital, discouraging investment.
Many blame distorted capital markets for the phenomenon, which keeps many inefficient companies afloat with cheap credit while denying it to more dynamic private competitors.
(Reuters)