China aims for super big when it comes to its industrial enterprises. China’s bureaucrats announced plans this week to push mergers in nine key sectors including steel, cement, shipbuilding, autos, and aluminum, and also set targets for just how consolidated they should become.
The aim: to meld fragmented industries, stem soaring overcapacity and price wars, and eventually create world-competitive companies.
A common feature of these nine industries is their economies of scale,” said Zhu Hongren, chief engineer of the powerful Ministry of Industry and Information Technology, which announced the merger strategy. The sectors, which include electronics, pharmaceuticals, industrialized agriculture, and rare earths, also suffer from surplus production and vicious price competition, he said, according to a January 23 report in the official English language China Daily. “Promoting mergers and reorganizations will help improve the efficiency of resource allocation, adjust and optimize industrial structures, and improve the global competitiveness of key enterprises.”
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Dexter Roberts, Bloomberg Businessweek via CHINA US Focus http://feedproxy.google.com/~r/ChinaUsFocus/~3/dtXTu-cSTVU/
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