China’s economy：Perverse advantage

economist.com 

A new book lays out the scale of China’s industrial subsidies

 CHINA is the workshop to the world. It is the global economy’s most formidable exporter and its largest manufacturer. The explanations for its success range from a seemingly endless supply of cheap labour to an artificially undervalued currency. A provocative new book* by Usha and George Haley, of West Virginia University and the University of New Haven respectively, points to another reason for China’s industrial dominance: subsidies.

 

The Chinese government does not report all subsidies made to domestic industrial firms, so the Haleys plugged the holes with information from industry analysts, policy documents, non-governmental outfits and companies themselves. By looking at the gaps between end-user prices and benchmark prices, they have cobbled together numbers on many of the subsidies enjoyed by the biggest industrial state-owned enterprises (SOEs).

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On their conservative calculations, China spent over $300 billion, in nominal terms, on the biggest SOEs between 1985 and 2005. This help often came in the form of cheap capital and underpriced inputs unavailable to international rivals. The glass industry got soda ash for a song, for example. The auto-parts business got subsidies worth $28 billion from 2001 to 2011 through cheap glass, steel and technology; the government has promised another $10.9 billion by 2020. The subsidies to the paper industry topped $33 billion from 2002 to 2009. All industrial SOEs benefited from energy subsidies.

The harm done by these subsidies to foreign competitors is ably chronicled by the Haleys. Rivals are forced to go up against national champions that enjoy subsidised inputs and seemingly free money in markets that are protected. Worse yet, the bosses of Chinese SOEs are not in business principally to make a profit: they are often encouraged by the government to pursue other goals, such as resource acquisition, foreign policies and technology transfer, regardless of cost.

Less obvious is the fact that these policies harm China as well, by nurturing unproductive and unaccountable behemoths. A recent study by Sea-Jin Chang of the National University of Singapore and Brian Wu of the University of Michigan found that new firms in China are more productive than incumbents but they are also more likely to fail. The authors blame “institutional barriers”.

Indeed, these barriers to creative destruction are even higher than they first appear, because state subsidies extend beyond state firms. Another new study by Fathom China, a research firm, argues that although small and medium-sized private firms are often starved of capital in China, many big private firms are at the official trough. The researchers looked at 50 prominent private-sector Chinese firms, and found that 45 receive subsidies (see table). Top of the list is Geely, an automobile firm that bought Sweden’s Volvo, which on Fathom’s reckoning would lose more than half its net profits without official aid.

Such distortions breed indiscipline and overcapacity. An effort to sponsor clean-energy champions is partly responsible for a global glut of solar panels, for instance, forcing even Chinese manufacturers such as Suntech into bankruptcy. (Suntech has just been bailed out by Wuxi’s city government.) A similar problem looms in the steel industry, where the country’s excess capacity of some 200m tonnes surpasses the entire capacity of Japan’s steelmakers.
Could change be coming? In the past few weeks the People’s Daily, an official paper of the Communist Party, has run several articles discussing SOEs, which is seen by some as a sign that an overhaul may be on the central government’s agenda. But many state-owned firms are powerful, with some of their bosses holding ministerial rank, and resistant to change. Chinese officials have repeatedly and publicly promised to raise the SOE dividend-payout ratio, for example, but SOE heads may have thwarted such efforts.

Leaders in Beijing are trying to encourage consolidation among SOEs but, as the Haleys note, “the central government’s removal of subsidies has often resulted in the provincial governments increasing them.” The unhappiest consequence of China’s subsidy policy may be that it has created beasts too powerful to rein in.
^{* “Subsidies to Chinese Industry”, by Usha Haley and George Haley. Oxford University Press, April 2013}

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經濟學人：中國補貼統一中控、中國旺旺

自由時報 2013-5-1

〔編譯盧永山／綜合報導〕英國經濟學人報導，中國政府透過補貼來扶植國營企業及特定民營企業，來自 台灣的統一企業中國控股有限公司及中國旺旺控股有限公司赫然在列。報導指稱，中國政府對這兩公司補貼占其二○一一年淨利的十八．二％及十一．三％，這種補 貼對外國競爭者不利，也對中國本身造成傷害。

補貼不利外企 中國也自傷

報導指出，外界多半將中國成為全球最大出口商及最大製造商的成就，歸因於廉價勞力及人為壓低匯率；但美國西維吉尼亞大學教授Usha Haley及紐黑文大學教授George Haley在新書中指出，中國產業主宰世界的另一原因是政府補貼。
中國政府並未公布對國內企業的補貼金額，Haley夫婦用來自產業分析師、政策文件、非政府團體及企業的資料，來填補這個缺口。透過檢視終端使用者價格及基準價格的落差，拼湊出中國大型國營企業享受的補貼。
根 據Haley夫婦保守估計，在一九八五到二○○五年間，中國政府在名目上對企業補貼逾三千億美元，通常是以廉價資金或折價進口的方式補貼，例如，玻璃業以 低價取得蘇打灰；汽車零件業取得廉價的玻璃、鋼鐵及技術，在二○○一至二○一一年間估享受到二八○億美元補貼，中國政府承諾在二○二○年前再補貼一○九億 美元；二○○二至二○○九年間，對紙業補貼達三三○億美元。所有大型國營企業也都獲得能源補貼。

或給廉價資金 或折價進口

書中指出，外國企業被迫與享受補貼及廉價資金的中國企業正面對抗；更糟的是，中國大型國企的主要經營目的並非賺錢，中國政府經常鼓勵他們尋求其他目標，包括不計成本地併購資源、達成外交目標和技術轉移等。

補貼政策也豢養出不具生產力及無須負責的巨獸，對中國造成傷害。根據新加坡國立大學教授張世真和密西根大學教授Brian Wu的最新研究，中國新設立民營企業比現有企業更有生產力，但也因沒有政府補貼，更可能失敗。

根據產業研究公司FathomChina的另一項研究，中國中小企業難以取得融資，很多大型民營企業卻也受到官方垂青。研究人員檢視中國五十家知名民企，發 現四十五家獲政府補貼，統一及中國旺旺赫然在列，中國政府的補貼占兩公司二○一一年淨利的十八．二％及十一．三％，分別達九○○萬美元（約台幣二．六七 億）和四七○○萬美元（約台幣十三．九二億）。