Chinese state-owned enterprises have nationalised at least 10 privately owned groups this year, prompting warnings that the trend risks sucking the vitality out of China’s economy.
While most of the country’s largest companies are SOEs, the private sector is the economy’s main engine, contributing 60 per cent of growth in gross domestic product, 90 per cent of new jobs and more than half of all fiscal revenue, according to an industry association for private companies.
But private groups have suffered disproportionately under Beijing’s aggressive campaign against debt and financial risk over the past 18 months. While SOEs generally enjoy easier access to loans from state-owned banks, private companies have been major recipients of credit from non-bank lenders.