Forging Reform in China: The Fate of State-Owned Industry

I remember one of my professors had said to me: "If you only read one book about SOE reform in China, you must read this one."His recommendation cannot be more correct. The writer has undergone an in-depth investigation of SOEs and their reform in China. The three case studies, namely, Angang, Magang and Shougang, are all very comprehensive. For anyone interested in corporatization of these SOEs, Chapter 5 is a must-read for them. In all, the book is a tremendous achievement when you consider that the writer is a Westerner.The writer thinks that the illness of SOEs is due to the continuous supply of soft budget from the government and state-owned bankers. The ownership issue - whether these enterprises are state-owned or in private hand - is not very important. However, my opinion is that you must not be a player when you also assume the role of referee. If this reform is to be successful, a detachment to government is necessary.Anyway, this is an excellent book.

Steinfeld displays an uncommon ability to view today's China in a fresh light, unbound by the constraints of conventional Western thinking. Highly recommended for anyone seeking to understand modern Chinese economic development and the elusive prospects for China's full participation as a world economic leader.

The author presents a different perspective on China's state owned enterprise problem. He contends that the problem is not an allocation of property rights issue. Instead, a supposed free market system has been overlaid over a still partially existing command economy. A fascinating theory. If the author is right, China's problems are very deep and will be extremely difficult to solve.