Breaking the monopoly. Check it out:
(China Daily Via Thomson Dialog NewsEdge) A market economy facilitating the development of all businesses, instead of just monopoly players, is in the best interest of the country, says a signed article in China Economic Times. An excerpt follows: PetroChina Company Limited (PetroChina) has topped the list of Asia's 150 best enterprises selected by Business Week. China Mobile cracked the top 10, coming from the 41st place last year to No 9. There are also 17 other Chinese businesses in the top 50.
It is not strange that PetroChina has secured the top position in Asia. Its outstanding performance primarily results from the consistent high price of petroleum, its monopoly on the domestic energy market and a fairly good corporate governance.
Admittedly, PetroChina has improved its corporate governance significantly in recent years and this has reduced errors in management decisions and sharpened its competitive edges. However, the first two reasons are the main engine for its business success. PetroChina's top position in the list is not purely a result of its business capability, but determined by its role in the country's energy strategy.
As a State-owned enterprise monopolizing a key industry of the country, PetroChina's position on the list does not reflect the real competence of the Chinese businesses in average.
The latest official figures show that State-owned enterprises are being gathered in the monopolizing industries, such as energy, transportation and communication. More than 80 per cent of the State-owned or State holding enterprises were making good profits in 2005.
However, academics observe that Chinese businesses are being less profitable on average. As long as the economy is not open enough to private capital in the country, the State support to the State-owned enterprises would impose more limits on the further development of the private sector, which, in turn, would threaten the commercial climate and the competence of the businesses. If a private company from China survived the market competition and becomes the best performer of Asia, we would be able to applaud for a successful market economy.
Copyright 2006 China Daily. Source: Financial Times Information Limited - Asia Intelligence Wire.
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