In China, a Power Struggle of a Different Order – NYTimes.com
The changes sought by the Communist Party leadership are limited. The party is not initiating a fundamental attack on public ownership or pushing for widespread privatization of state leviathans. It aims to split state-owned enterprises or to bring more private investment into sectors dominated by the state, including banking, energy, rail and telecommunications.
The idea is that doing so will reinvigorate the Chinese economy, the second-largest in the world, after that of the United States, at a time of flagging growth. The state’s dominance in strategic industries including banking, defense, power, resources, telecommunications and transportation would almost certainly remain firmly in place.
“The new leaders may introduce more competition to some industries now monopolized by S.O.E.’s,” said Qiu Xiaohua, a former chief of the National Bureau of Statistics of China . “But they will definitely abide by the basic principle, which is keeping public ownership as the backbone of the economy.”
The debate over the future role of large state enterprises in the Chinese economy has been heating up before the Communist Party leadership change, which is expected to be formalized at the 18th party congress, scheduled to open in Beijing on Nov. 8.
Mr. Liu of State Grid and the leaders of other large state enterprises that resist change are in a position of strength. They dominate strategic industries with almost unlimited access to financing from state-owned banks, and they enjoy strong political connections. They have all been appointed by the party and many are political heavyweights in their own right. Mr. Liu, for example, is an alternate member of the party’s 204-member central committee, China’s top ruling body.