The good, the bad and the ugly

“THE PURPOSE OF SOE reform is not to get rid of them from the market; on the contrary, we want to make them bigger…we need to maintain the status of state ownership as the dominant power in the Chinese economy.” Fu Chengyu, then the boss of Sinopec, a state-owned oil giant, was speaking exactly a year ago, at the Summer Davos conference, an annual gathering in China of global business executives and Chinese leaders organised by the World Economic Forum (this year’s meeting is taking place this week). His remarks prompted a sharp response from Dong Mingzhu, the chairman of Gree Electric, a state-owned firm and the world’s largest manufacturer of domestic air conditioners. She noted that Sinopec operated in a “monopolistic industry” whereas Gree had to fight for customers as a “private, market-oriented company”. She went on: “What we really need is an environment of free competition instead of support from the government.”