China’s Communist party must tighten its grip on state-owned enterprises in order to maintain the “socialist direction of their development”, the country’s leadership said, an edict that chafes with reforms aimed at improving efficiency and profitability in the lumbering sector.
A planned overhaul of the sector, which accounts for two-fifths of economic output, according to Goldman Sachs, has already disappointed investors. Many in the Chinese and international business community have been hoping Beijing would start to relinquish some control.
This is seen by some as especially urgent since the economy is on track to post its weakest annual growth rate in a quarter of a century this year and the government has been struggling to identify sources of new economic vitality.