Communist China told to ‘Let the fittest survive’ in business


World Finance & Economy
Image for illustration only. For image text, go to https://www.azquotes.com/quotes/topics/survival-of-the-fittest.html

Communist China told to ‘Let the fittest survive’ in business

PORT MORESBY: The head of China’s largest and oldest state-owned company in Hong Kong wants the communist government to let competitive forces play a bigger role in certain market-oriented industries.

China Resources Group chairman Fu Yuning said the government should continue to dominate industries monopolised by state entities, such as power distribution and transmission, but industries that are already populated by private enterprises or quasi-state companies should be allowed to compete.

“Let the fittest survive,” he added.

Will communist China take heed of Fu’s advice?

Read on for the details:

China Business
Head of China’s biggest state firm in Hong Kong urges Beijing to deepen market reforms

· Fu Yuning, chairman of China Resources Group, says competition is necessary for state enterprises to reform themselves and emerge stronger on the global stage

Laura He
Published: 7:00am, 17 Apr, 2019
Fu Yuning, chairman of China Resources Group, which owns US$160 billion worth of assets. Photo: Felix Wong
The head of China’s largest and oldest state-owned company in Hong Kong has recommended that the government should let competitive forces play a bigger role in certain market-oriented industries.

The government should continue to dominate industries monopolised by state entities, such as power distribution and transmission, whereas industries that are already populated by private enterprises or quasi-state companies should be allowed to compete.

“Let the fittest survive,” said Fu Yuning, chairman of China Resources Group, a conglomerate with its earliest presence in Hong Kong tracing back to 1938 and owning US$160 billion in assets.

He was speaking at an event on Tuesday organised by Our Hong Kong Foundation, a think tank set up in 2014 by former chief executive Tung Chee-hwa.

Fu’s comment comes at a critical juncture in China’s economic reforms, when state enterprises and private businesses are locked in a collective soul-searching to stake a claim in the world’s second largest economy. At stake are government resources, access to crucial financing, market access, technology and regulatory barriers.
A labourer works at an assembly line in a factory of China Resources’ Snow Breweries, in Lanzhou, Gansu province, in this August 25, 2010 photo. Photo: Reuters
“Beijing’s attitude [towards state enterprises] is firm and clear: if you lose, we will just let you collapse and go bankrupt. Competition is necessary for state enterprises to reform themselves and become stronger on the global stage.”

Fu said that history has taught China a lesson that a planned economy fully based on administrative orders does not work, as the economy was on the brink of collapse before 1978 and people lacked food and clothing.

“Reform is still the current consensus among most [top officials] in Beijing,” he said.

“Going ahead, market forces will play a rising role in the economy.”

Fu also said China will not sink into an economic recession or fall into a middle income trap, as its economic growth is not slow compared to other major economies.

Still, the government needs to fix the regional economic disparity, especially northeast China’s net population outflow, and support western China’s development.

China Resources Group owns a dozen listed companies in Hong Kong and China, spanning industries like retail, power, property, cement, gas, health care, and financial services.

As the biggest central government-owned firm in Hong Kong, Fu said the company’s future strategy in the city is to help Hong Kong with its clean energy development, help with the disposal of its growing urban waste with infrastructure support from cities in the Pearl River Delta, and encourage more tech start-ups to settle in Hong Kong to spur innovation.

He also said the central government’s blueprint for the Greater Bay Area, can help Hong Kong and Macau integrate further into the Chinese economy and solve the employment issues facing the cities’ younger generations.

China Resources Group is working with Hong Kong universities to provide job opportunities in mainland China under the group’s Pacific Coffee Company, Fu added. - South China Morning Post

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