Your prose is as clear and informative as ever, but you do not disprove or even dispute my two thesis:
1. That state-owned enterprises are a drag on China's development, sucking resources that would be much more productive in private hands. Or, as Cao puts it:
>> "At present, state firms take up roughly 70 per cent of the means of
>> production but they are only responsible for 30 per cent of the value of
>> industrial production," he said.
>>
>> Mr Cao quoted figures from the official press showing that up to
September,
>> state enterprises had run up losses amounting to 74.8 billion yuan
(HK$69.56
>> billion).
2. That the extensive control of the economy by a meddling bureaucracy has resulted in widespread corruption.
Far from being confined to China, these two elements can be verified in any country: the more state, the worse. The real challenge for the present leadership of the PRC is how to combine efficiency and honesty with a model that is faulty, but can't be suddenly thrown away without risking the de-legitimization of the political system and a phase of serious instability. In a sense, they are facing challenges similar to those experienced in Europe by the absolute monarchs in the 17th and 18th century: how to ride the tiger of economic development, managing the transition to an open society through a phase of enlightened autocracy, slowly divesting power but without having to face the guillotine. Which is why the preferred traditional philosophy has already shifted from the absolutistic and centralistic model of Legalism (liked by Mao Zedong) to a more Confucian attitude (hence Deng's attention for the Singapore model).
Cheers --
Enzo