Table of Contents
Preface ix
Acknowledgments xiii
Introduction 1
1 Understanding China's Economic Slowdown after the Global Financial Crisis 7
China's Global Economic Role 8
Causes of the Slowdown 10
The Rebalancing Strategy 28
Explaining the Rebalancing Progress 31
2 China's Convergence Potential 43
Approaches to Analyzing China's Growth Potential 43
International Convergence in Asia 46
Disparities within Groups of Chinese Firms 48
Explaining the Weaker Performance of State Firms 63
Potential for Domestic Convergence 78
3 China's Failing Strategy to Reform State-Owned Enterprises 81
Corporatizauon 81
Mergers 86
Mixed Ownership 91
Debt-to-Equity Swaps 93
Governance Reforms 94
Financial Reforms 95
Conclusion 96
4 The Path Back to Market-Oriented Economic Reform 99
Reduce Barriers to Entry 100
Promote Mergers and Acquisitions and Bankruptcy 101
Reform the Financial Sector 104
Improve Governance 117
5 Prospects for Further Economic Reform 119
Obstacles to Reform of State-Owned Enterprises 122
Reasons to Be Optimistic 127
Appendices
Appendix A Assets in China 133
Appendix B Enterprise Subsidies 139
References 143
Index 155
Tables
Table 1.1 Factors affecting China's growth 11
Table 2.1 Losses of state firms, 2005-16 52
Table 2.2 Return on assets of state and private service sector firms, 2008 58
Table 3.1 Corporatization of state-owned industrial enterprises, 1995-2016 84
Table 3.2 SASAC-orchestrated mergers, 2015-17 88
Table 3.3 Return on assets of central SASAC emerprises, 2005-17 89
Table 4.1 Domestic merger and acquisition activity, 2007-2015, and 2016 102
Table A.1 State assets, 2014 135
Table A.2 Assets of state nonfinancial enterprises, 2008-15 136
Box
Box 2.1 Metrics for judging economic performance 51
Figures
Figure 1.1 State and private investment, 2006-16 19
Figure 1.2 Private consumption as a share of GDP, 1973-2016 28
