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George Haley in the Hong Kong Economic Journal

Release Date:
5/1/2013 9:00 PM

Hong Kong Economic Journal May 1 “George Haley in the Hong Kong Economic Journal”

[via Google Translate]  [original source]

Net of subsidies, mainland enterprises can make money?

"Economic Journal" Investors Diary: ...... China has been able to become the "factory of the world" and the world-conquering major exporter, is an inexhaustible supply of cheap labor, being to drive down the exchange rate, or other The reason? Has been quoted by the West Virginia University professor Esha. Hurley (Usha Haley) and Professor George University of Niuhe text (University of New Haven). Hurley (George Haley), co-author of the new book "Chinese industrial subsidies (Subsidies to Chinese Industry), from which a glimpse of the" factory of the world "" secret "solution the world. Gu title implies, the two scholars the success of China's manufacturing industry, due to the government all kinds of subsidies, including the cost of capital seems to be the absence of cheap supply of raw materials and at your fingertips.

Hong Kong people, the state-owned enterprises abuses mentioned in the book is not new, such as CEOs of state-owned enterprises and the interests of shareholders as the primary consideration is not to make money, such as overseas mergers and acquisitions for the completion of the "political task", set the expense of cost-effective, we are all familiar. However, the two scholars as the starting point to the end-price of the products of state-owned enterprises (end-user prices) with the gap between the market reference price, trace the origin of looking through a large number of policy documents, the information provided by non-governmental organizations and state-owned enterprises, the price gap between the bottom due to different industries enjoyed subsidies "quantitative".

For investors, once mastered specific estimates of government subsidies of state-owned enterprises, the next step just got the annual reports of the relevant companies, carefully check the comparison, state-owned enterprises without subsidies support is still profitable, it should be a pretty good idea.

For example, two "conservative" projections mainland auto parts industry in 2001-2011, through different forms of cheap glass, steel and technology support for government subsidies totaling up to $ 28 billion; 2020, the industry estimates will also receive an additional subsidy of $ 10.9 billion. Another example is the paper industry for government subsidies of $ 33 billion between 2002-2009. In addition, all state-owned enterprises are to benefit from energy subsidies ...

"Grandpa" backing indiscriminate expansion

"China's industrial subsidies," a book for the state-owned enterprises, but "by the people" refers to research institutions Fathom China a recently published report found that many of our investors are very familiar with large-scale private enterprises, such as Geely Automobile (175) , Yurun Food (1068), Heng International (1044), China Gas (384), tasted the benefits from government subsidies, compared with the state-owned enterprises is not much better. Fathom 50 large-scale private enterprises in the Mainland to conduct research, found that up to 45 different forms of government subsidies [Table].

According to the agency's estimates, topped the list of Geely Automobile lose subsidies, in 2011 net profit will shrink by more than half!

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