CHINA MUST TAKE URGENT ACTION TO PUSH ITS PRIVATE SECTOR PAST A CRISIS OF CONFID

Posted by kuailai99 on September 18th, 2018

For people seeking internet fame or infamy, making shocking claims is one of the surest routes to generate eyeball traffic.To get more chinese business news, you can visit shine news official website.
In that sense, Wu Xiaoping, who was until recently an obscure investment banker turned internet entrepreneur, achieved instant notoriety last week when he posted a short essay on Chinese social media arguing that China’s private sector had played its historical role in assisting the leap forward of the public sector and should be phased out. In its stead, a brand-new, more focused, and more united state-private mixed ownership sector with greater economies of scale would gain more prominence in the socialist market economy, Wu said in the post.
 His post went viral before it was eventually deleted, as it appeared to strike a raw nerve in the ongoing debate about the current state and future of China’s private economy, at a time when President Xi Jinping has strengthened the Communist Party’s controls at all levels of society and placed more emphasis on the role of the state sector.Wu’s post was mostly met with criticism and scorn from online users who dismissed it as odd or ludicrous. More interestingly, several influential Chinese newspapers – including party mouthpiece the People’s Daily, The Beijing News and the Economic Daily – treated Wu’s post as more than an attention-seeking stunt and ran sharply worded commentaries to rebuke him. All have pointed out that Wu’s post represented a wrong way of thinking that is gathering steam in China.
 The People’s Daily said in a social media post on Thursday that the private sector would not be phased out, but would only get bigger and stronger. However, it acknowledged that the sector was under great pressure, with small enterprises facing a life-or-death test because of economic headwinds. It said the negative comments on the private sector were aimed at creating market panic. Indeed, Wu’s post has reminded many people of the party’s ruthless nationalisation of private businesses in the 1950s, which first started through introduction of the so-called state-private joint ownership.Wu, who used to be an investment banker at the China International Capital Corporation – the country’s first Sino-foreign joint venture investment bank – confirmed to official media he was the author of the post but declined to elaborate further.
His former colleagues at CICC and media reports have described him as someone keen to make shocking comments to get exposure. Curiously, since 2015, the Chinese government has accelerated its so-called mixed ownership reform, allowing private capital to invest in state-owned enterprises. But that reform is aimed at revitalising the state sector, and private businesses are not allowed to take a controlling stake in state-owned enterprises. Apparently, Wu was not referring to this reform, as his arguments were aimed in the other direction. If nothing else, he certainly picked the right time to stir up the debate, as the Chinese government is gearing up to mark the 40th anniversary of reform and opening up amid rising concerns over the country’s direction.