The Chinese form of economy is undergoing change. Moving from a centralised structure focusing on Beijing control of the levers of economic growth to a decentralised structure that brings local initiative into play is the big difference with the old Soviet system and the change works. China is growing, its people are enjoying unparalleled prosperity.
But change is not a one-way street. It brings its own problems and the head of one of China’s largest state owned manufacturers has said that mismanagement by local governments is partly to blame for business failures that have prompted a series of bond defaults. “Bad internal management, unclear strategy, inadequate entrepreneurship and government mismanagement” are the main causes.
The key point? – “Government protection won’t create a good company, competition will” says Wang Min President of XCMG Group, China’s biggest construction machinery business.
This reflects China today – change, development, initiative but with mistakes, bad decisions and setbacks as well. China is not dull, predictable, or protective – it is imaginative, experimental and forward thinking.