China's Gonna Bust Monopolies!

[MachineGhost]

China's outgoing Premier, Wen Jiabao, vowed in a speech earlier this year that Beijing would push ahead with monopoly- busting. "We must move ahead with reform of the railway, power and other industries, complete and implement policies and measures aimed at promoting the development of the non-state economy, break monopolies and lower industry thresholds for new entrants," Wen said.

All signs are that the next leaders of China - Xi Jinping, who is widely expected to replace Hu Jintao as paramount leader, and Li Keqiang, on tap to succeed Wen as premier - will generally stick to that script. Critics say the sheer size and market dominance of big state owned enterprises (SOEs) creates a drag on the economy through vast opportunity for corruption and waste, leading to higher costs for consumers.

In the lead up to the transition, Beijing has been engulfed in one of its biggest and most disruptive scandals in decades: The disgrace of party princeling and charismatic leadership contender, Bo Xilai, and the suspended death sentence handed down to his wife, Gu Kailai, for the murder of a British businessman.

The sensational implosion of Bo's political career and public revelations of greed and corruption exposed deep fault lines and bitter factionalism at the top at a time of slowing growth in the world's second-largest economy. When the new leadership is in place, it will be under immediate pressure to break the grip of inefficient SOEs and reinvigorate China's three-decade-long economic miracle. But on economic policy, too, there's division within the party.

http://www.reuters.com/article/2012/10/ ... MP20121016