Chinese SOEs maintain rapid profit growth

[Chinese-Dragon]

Shut down 99.99%SOEs
keep the critical ones like state grid
transfer most resource to private enterprises.

The Private sector only cares about profit maximisation. They don't care about social costs/benefits unless they are forced to pay for it, or when they can use it for advertising purposes (when charity is done by private companies it is used as a form of advertising).

There needs to be a balance between the Private sector and the Public sector. Especially when it comes to merit goods like education, or demerit goods like tobacco and gambling. Or negative externalities like pollution.

 

[newb3e]

thou shall not find indian barking dogs when correct facts and figures are quoted against Mighty India!

 

[AndrewJin]

thou shall not find indian barking dogs when correct facts and figures are quoted against Mighty India!

They are real news, becos they have PPP number.

 

[dy1022]

No wonder shining SP 2012 is more hunger than North Korea in 2017!

 

[GS Zhou]

Shut down 99.99%SOEs
keep the critical ones like state grid
transfer most resource to private enterprises.

your plan is hard to come true in a real world setting.

Lets assume the SOEs as a trade-able company at the stock market. This company makes 2.4 trillion yuan profits Jan. to Oct. this year. So for a full-year result, this company very likely to make close to 3 trillion yuan profits.

3 trillion yuan as profit! If we assume a 15x multiple, the market cap of this company could be close to 50trillion yuan!! Or 6~7 trillion USD! No one, or even no country, could afford this amount of money!

BTW, the 6~7 trillion USD valuation is for the "normal" SOEs only, we even not include the financial companies yet.

 

[Han Patriot]

The Private sector only cares about profit maximisation. They don't care about social costs/benefits unless they are forced to pay for it, or when they can use it for advertising purposes (when charity is done by private companies it is used as a form of advertising).

There needs to be a balance between the Private sector and the Public sector. Especially when it comes to merit goods like education, or demerit goods like tobacco and gambling. Or negative externalities like pollution.

Private enterprises are profit driven, the easiest path to make a profit is less expenditure and more revenues. So they won't invest much in long term strategic research that will use alot of initial capital. They would rather import. India is not realizing this yet.

Furthermore, the profit of private companies go to the shareholders, profit from SOEs go to the government and the government would have more cash to spend. That's why the Indian government is lacking in revenues. There needs to be a balance of mixed ownership.

In a pure private economy, there won't be HSRs and mega dams which takes decades to achieve an ROI. However, the unseen social profit is not seen, the stimulus to the economy, the growth in the economy is not calculated.

 

[Dungeness]

Shut down 99.99%SOEs
keep the critical ones like state grid
transfer most resource to private enterprises.

SOEs might very possibly be one of few things that makes China so different from the rest of world.

 

[TaiShang]

I doubt India can follow China SOE, cultural differences, that applies to majority of the countries.

Agree. Probably they should not follow China SOE model because it would backfire badly. But, the current model, too, seems to backfire given the tiny size of India's government budget. If the +-300 billion USD figure is correct, that cannot be explained the size of India's GDP in comparison to China because, China GDP is perhaps five-six times the size of India's but China's state budget is more than seven times of India's.

I think the governance culture is difference, and this is no sin, everybody has the right to, and should, follow their own model that they think fits best. What is intolerable is them coming and lecturing us about what we should do with our own public management.

Many of our Indian friends are pegging their hope on private enterprises to rescue their abysmal defense industries. They believe their private companies holds that magic "philosopher's stone", that would turn iron into gold. None of them would bother to think a little deeper why China's SOEs can succeed where Indian counterpart failed.

I think the concept of public goods is viewed differently in both countries. Normally, it is a little bit strange. China, being a more down-to-earth (secular) culture/civilization, should, theoretically, be less suitable to communal/public good than a less secular and mundane culture of India.

Maybe they do not have SOE champions not because they do not want them, but because they cannot create one.

So they hate what they can't have.

 

[Mista]

中央部门和单位所属企业

Irrelevant question. Am I the only one who see the word 门 (door) different? Not just here but elsewhere too. My typing is different too.

 

[leviathan]

Shut down 99.99%SOEs
keep the critical ones like state grid
transfer most resource to private enterprises.

NO! Not in million year! Keep SOE is one of few things that CCP done right at start of market opening!!
First of all, beside all the tax, the profit of SOE is direct revenue to the central government! Do you ever think a private company will spent money to build an inch of high speed rail in place like GUIZHOU? Its a 50 year guarantee money losing project!

Second, Why the hell you give resource/energy sector out? Those sector is guarantee monopoly. Even a retard CEO can make profit from the resource/energy sector! Haven't you seen all those private coal companies in SHANXI as example? NO safety! NO standard! Huge pollution!! and YET they drove their Bentley around!! Their business model is to hire cheapest labor to mine the coal in cheapest way and use the money to buy its way out for any anything! That's why SHANXI is the most corrupted place in China! A place where slavery can still exist in 21st century!
山西黑砖窑案

Last, in any time and under any circumstances! SOE is loyal to China! Unlike private company, in time of need and emergency, they flee! END OF STORY!

 

[Chinese-Dragon]

NO! Not in million year! Keep SOE is one of few things that CCP done right at start of market opening!!
First of all, beside all the tax, the profit of SOE is direct revenue to the central government! Do you ever think a private company will spent money to build an inch of high speed rail in place like GUIZHOU? Its a 50 year guarantee money losing project!

Exactly.

Large dams for example can take decades to see a return on investment.

Now imagine you are the head of a company in the private sector, how do you explain to your shareholders that they won't see any returns until several decades later? They will fire you.

 

[Han Patriot]

Irrelevant question. Am I the only one who see the word 门 (door) different? Not just here but elsewhere too. My typing is different too.

I think you are not Chinese...because any Chinese would know that term is not a door. Bu Men is not a door.

NO! Not in million year! Keep SOE is one of few things that CCP done right at start of market opening!!
First of all, beside all the tax, the profit of SOE is direct revenue to the central government! Do you ever think a private company will spent money to build an inch of high speed rail in place like GUIZHOU? Its a 50 year guarantee money losing project!

Second, Why the hell you give resource/energy sector out? Those sector is guarantee monopoly. Even a retard CEO can make profit from the resource/energy sector! Haven't you seen all those private coal companies in SHANXI as example? NO safety! NO standard! Huge pollution!! and YET they drove their Bentley around!! Their business model is to hire cheapest labor to mine the coal in cheapest way and use the money to buy its way out for any anything! That's why SHANXI is the most corrupted place in China! A place where slavery can still exist in 21st century!
山西黑砖窑案

Last, in any time and under any circumstances! SOE is loyal to China! Unlike private company, in time of need and emergency, they flee! END OF STORY!

The best strategy is privatize unprofitable and non strategic sectors and retain strategic cash cows. And then introduce some private competition to balance it up. That is exactly what China is doing...creating competitive SOEs, the best model is the Singaporean SOEs.

 

[Mista]

I think you are not Chinese...because any Chinese would know that term is not a door. Bu Men is not a door.

Read carefully. I refer only to the word 门，not 部门.

 

[Han Patriot]

Read carefully. I refer only to the word 门，not 部门.

In that context, it's not a door, it can only have meaning as as department

 

[Mista]

In that context, it's not a door, it can only have meaning as as department

I know that. You're missing my point.

I'm referring to the character 门 ONLY, because everywhere on the Internet I see the 写法 is different. I'm not sure whether I'm the only one. And apparently only on my Google Chrome.

In that context, it's not a door, it can only have meaning as as department

Your character 门 is probably working just as fine so you don't understand what I meant. Allow me to explain.

I just asked my friend and he also had the same problem. It appears as the following.

It seems like our system got mixed up with Japanese Kanji, and that's not even a proper word in Japanese. It's only written for simplification of the traditional character 門 and is not officially recognized.

https://en.m.wiktionary.org/wiki/门