China should deal with zombieföretag

the Plan is now presented on the new and will result in four provinces in northern China to a beginning lay down their unprofitable state-owned enterprises, said the state media recently.

On 21 January, China's supreme leader Xi Jinping raised the issue in a speech.

He said that large forces are needed to remove the zombieföretagen and free up resources needed elsewhere.

the closure plan is not new, it has appeared several times in the past. A work in this direction began during the first half of 2018, but the plan was abandoned when the economy turned down. It has occurred each time the chinese leaders are scared of the realization that closed factories, leading to sharply higher unemployment.

the Unemployment rate, in turn, can start a protest where the cape is directed against the governing Communist party.

Is there anything that intimidates both local and central politicians in China so is it a scenario where large groups of the unemployed are turning the anger against the party.

it is with a warning of the consequences of the plan to close the zombieföretag dusted off. In particular, as the chinese economy is not growing as quickly as in the past and China are in a trade war with the united states.

the Idea is about to strike again just over 2,000 unprofitable state-owned companies, which are controlled from the central level, according to the statistics of SASAC, the state commission that monitors and manages the state-owned assets.

If even sleeping companies on the local level counts, it is about the over 10,000 companies, writes Hongkongtidningen South China Morning Post.

It was several years ago, these companies played out their role, if they ever had one.

In a rapid phase of progress in China built capacity in diverse industries, such as cement, steel, aluminium and refining of oil. All countries have at some stage in their development been overcapacity in some industries. The difference in China is the size.

China used between 2011 and 2013, gives an indication of the huge scale. During the three years it went to the more concrete in China than what the US did during the entire 1900-century, according to statistics from the US Geological Survey, which is the US counterpart to the Swedish national land survey of sweden.

a Hundred years of construction in the united states was exceeded by far by China during these three hectic years, when the country was undergoing its most intense urbaniseringsvåg, the largest in the history of the world.

the Back can be seen in the form of the company for many years been pure förlustaffärerna.

Why companies have not been put down in the past?

to the so-called järntriangeln of state-owned enterprises, local politicians and the local banks had the same agenda. All have loved to have had something to gain from pumping in more money in the unfit and unprofitable companies.

First and foremost, the companies escaped out of bankruptcy for a time. Hundreds of thousands of workers have got to keep their jobs.

But also to local banks made money on the stock. The risks, they've been able to ignore, ensuring that they have been being covered up from the central source.

For local economic activity has seen good on paper – it has been so they have been estimated.