China's private sector should not suffer for SOEs' revival

Government economic intervention and shadow banking clampdown have helped state companies

20180707 china steel factory

China’s metals and mining sectors, dominated by state-owned companies, captured 70% of the country’s industrial profit growth last year.

State-owned enterprises are often blamed for China's economic problems. But amid President Xi Jinping's affirmation of the importance of SOEs, "supply-side" reforms over the past two years have resulted in an improvement in their performance on most metrics.

Unfortunately, these gains have come largely at the expense of private companies, many of which have suffered declining margins, smaller profits or rising losses.

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