Comments on: Anti-Monopoly Law: New Guidance for China’s State Sector

By: Stan

Stan — Sun, 07 Mar 2010 18:20:40 +0000

Sort of depends on what the ultimate goal is of new AML rules. Don’t assume that a new policy will necessarily move in the direction of liberalization in industries dominated by SOEs. However, the government has much more control over the actions of large SOEs than it does with controlling the corrupt actions of local officials. In that sense, if the Central Government really wants to effect change in this area, it probably could do so to some degree. That being said, I don’t know what the specifics are and what they may try to do.

By: Bill Rich

Bill Rich — Sun, 07 Mar 2010 18:10:17 +0000

If legislation and fierce enforcement didn’t stop corruption, why would you think a guideline to the all powerful SOE’s will make any difference, except in accelerating the promotion of some officials through prosecution/promotion routine.

By: Stan

Stan — Sun, 07 Mar 2010 04:09:09 +0000

I don’t like it to admit it sometimes, but in some industries, the best a foreign investor can hope for is short or medium-term success, perhaps in a JV with one of the “chosen” SOEs. A lot of them will eventually get pushed out.

It’s a big country with a lot of sectors, though. Not every one is like cars or online games.

It’s not like we’ve never seen aggressive industrial policy before, though, right?

By: G.E. Anderson

G.E. Anderson — Sun, 07 Mar 2010 02:14:00 +0000

My initial reaction is, “Great! But why would a private investor dare to enter into an industry dominated by the state?”

Then I look at the auto industry, and that’s exactly what’s going on. Why do BYD, Geely and Great Wall (ostensibly private enterprises) dare to compete with the likes of Shanghai Auto, First Auto, Dongfeng and Chang’an?

Something different is going on in China, and it poses a serious challenge neo-liberal economic theory.