User talk:U0807997

The Prosperous State Owned Enterprise - a problem of China's economy

Lots of Chinese scholars and economists seem to be very proud and excited when speaking of China’s state owned enterprises. The following facts have also been bluffed nationwide by all kinds of Medias, demonstrating to them that they should be proud of China’s economic performance.

Should people be really happy?
However, should Chinese people be really happy about these facts?


 * Globally, Industrial & Commercial Bank of China (ICBC) been the most profitable bank for consecutive three years since 2008;]
 * PetroChina has overtaken Exxon Mobil with highest market value;]
 * 3 out of the top 10 enterprises in 2010 published fortune global 500 are Chinese state owned companies;
 * Among the fortune 500, 54 are Chine se enterprises but the top 10 of them are all state owned.
 * Finally, all those 54 companies together are able to contribute around 18% of the 500’s net profit, given only 8% of the total revenue.

Our point is, there is nothing worth proud but in fact, much more worth worrying about from these five “beautiful” facts and the reason is simple, because, all these beauty of China’s economy goes to the stated owned companies.

Reasons of the criticism
Some senior management of these giants was confused and complained why they are always criticized; no matter they lost money in financial crisis like 2008 or became the most profitable company in recent years. Again the reason is pretty strait forward. Being a monopoly in such a big market, they were not even able to make a positive profit once the world economy goes into a recession. In addition when they are able to earn the most, none of their profit actually benefits the Chinese people. Although they are all governed under State-owned Assets Supervision and Administration Commission (SASAC), it is estimated that only less than 10% of their annual profit is required to hand over to the central government. However, their intensive market power endowed by Chinese governments are, in some sense, leading China back to a centralized economy with series problems of monopoly, price manipulation, low-efficiency, no incentive for technology innovation, corruption, deteriorating uneven wealth distribution, and most importantly, crowding out the private sectors.

Hidden Facts
There are also some “hidden” facts that were found by deep studies.


 * China Mobile is able to use its monopoly power to charge 8 times higher than western mobile companies without even paying the 3G license, which can costs billions of dollars and bring its net profit to negative directly. Hence its title of “most profitable mobile company” does not come from any cost saving or efficiency pursuing, but rather, its monopoly pricing power and connects with government to wave out the licensing fees.
 * State Grid – the only electricity net provider in China ranked 7th among the “Fortune 500” in 2010, with even more monopoly power than China Mobile, was end up with a negative 343 million US dollars as its net profit. Power limitation has been another problem for China every year and became more serious in 2011. But the truth of the limitation is that in fact there is abundant electricity production but insufficient electrical net supply from State Grid, who is ridiculously expanding its business overseas, choosing not to provide enough services to native users.
 * Lastly but not the last one, as mentioned above that PetroChina has overtaken Exxon Mobile with the largest market value. However, it is common sense that market value means nothing but bubble. PetroChina’s profitability, efficiency and oil reservation are all far behind Exxon Mobile or other international oil giants. More importantly, China’s serious inflation problem, although largely due to U.S’s financial war, is also partly affected by the oil price manipulation from PetroChina. It again becomes a joke that theoretically although PetroChina is a state owned enterprise which should be under the supervision of SASAC; their senior management’s political hierarchy is identical, or even higher than SASAC. In other words, SASAC has the absolute power to prevent private sector from rising price but allow state giants such as PetroChina to control the pricing power of inputs. Situations like this will be a great threat to China’s private sector, which should have been the real engine to push the economy forward.

Although this special China state owned enterprise problem is largely originated from its political system and the “half market, half centralized” featured economy, there are still much space for China to improve the situation without affecting its governance or stability.

The right definition of state owned enterprise
First of all, we think the state owned enterprise should not be proud of making profit any more. Instead they should be defined as nonprofit organization and the main objective for them should be defined as, to assist and help the private sector to achieve the greatest market efficiency, in the mean time maintain the stability of the market.

It is for sure that such hope will be very difficult to achieve as China is a large country with too much interest conflict within this issue. There is also no private enterprise which is able to replace those state giants at this moment. But we think more and more people start to realize this rooting problem of China economy and gradually to improve the situation through better market regulation and revolution. Hopefully a free market economy with corresponding mature governance and regulation can be established through the efforts of this generation. We believe this is the correct way for China to grow into a developed country in the future.

Reference and External Links
1. ICBC http://en.ce.cn/Business/Enterprise/201004/01/t20100401_21220107.shtml 2. PetroChina http://news.bbc.co.uk/2/hi/7078518.stm 3. Fortune global 500 list http://money.cnn.com/magazines/fortune/global500/2010/full_list/ 4. PetroChina 2010 Annual Report 5. State Grid Web http://www.sgcc.com.cn/index.shtml 6. China Mobile Web http://www.chinamobileltd.com/?lang=en 7. PetroChina Web http://www.cnpc.com.cn/cn/ 8. PetroChina Wiki http://en.wikipedia.org/wiki/PetroChina 9. State Grid Wiki http://en.wikipedia.org/wiki/State_Grid_Corporation_of_China 10. China Mobile Wiki http://en.wikipedia.org/wiki/China_Mobile_Communications_Corporation

The problem with The Prosperous State Owned Enterprise - a problem of China's economy
Hello, but your page The Prosperous State Owned Enterprise - a problem of China's economy has been proposed for deletion. Wikipedia is not a place to post essays, so you must write from a neutral point of view. In other words, your article should not attempt to convince the user of its point like you did. Even then, your title is too long, and the "a problem of China's economy" is a violation of WP:NPOV. Just letting you know. Thank you. Thekillerpenguin (talk) 05:08, 21 September 2011 (UTC)

Proposed deletion of State-owned enterprise of China


The article State-owned enterprise of China has been proposed for deletion&#32; because of the following concern:
 * unencyclopedic in style, orphan, not an asset to the encyclopedia

While all contributions to Wikipedia are appreciated, content or articles may be deleted for any of several reasons.

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Please consider improving the article to address the issues raised. Removing will stop the proposed deletion process, but other deletion processes exist. In particular, the speedy deletion process can result in deletion without discussion, and articles for deletion allows discussion to reach consensus for deletion. Pam D  09:38, 9 October 2011 (UTC)