Wait and see

Article Abstract:

China's economy is near but not yet at the bottom of its cycle, with a relatively soft touchdown anticipated thanks to firm austerity measures. Reforms of state-owned enterprises are on hold, with changes presently limited to improved management and margers of ill companies with healthy ones. Growth has slowed to 10.3% in the first six months of 1995 and inflation is down over the past three quarters, while last year's Jan-June trade deficit of $8.1 billion became a surplus of $13.2 billion this year.

Government ownership, Nationalization

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China's currency is safe

Article Abstract:

It is possible to argue that China's currency, the renminbi, is actually undervalued at present levels. Macroeconomic indictors seem to suggest that the renminbi should appreciate, given that high growth is anticipated in 1998 and that inflation has fallen. A devaluation of the renminbi would not be appropriate in the current climate. Such a move would have a negative impact on foreign direct investment and would also bring new dangers of inflation, which has been reduced by strict austerity measures.

Administration of General Economic Programs, Currency Stabilization Programs, Prices and rates, Column, Monetary policy, Currency stabilization, Yuan (China)

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The corporate approach

Article Abstract:

China is edging closer to privatizing its state-owned companies under a plan to issue workers shares, eventually transferable, in their own firms. The country began experimenting with similar ideas in 1984. As the govt makes firms more independent of political control, however, it must still act as a concerned owner in overseeing management. Thus it will probably require that state assets be sold at or above their net asset value and stay active in payout policies related to shareholders.

Management, Government business enterprises, Public enterprises

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