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State-Owned Enterprises Warned of Upcoming “Winter Conditions”

Shao Ning, Vice Chairman of the State-owned Assets Supervision and Administration Commission (SASAC), recently attended a management conference at which he stated, “After 30 years of rapid development, the Chinese economy has entered a period of contraction. State-owned Enterprises (SOEs) must prepare for ‘winter conditions’ in the next three to five years.” The first time that the SASAC discussed “winter” was last December when Huang Shuhe, a Deputy Director at SASAC warned twice that SOEs must be prepared for tough winter times in the next three to five years. SASAC Director Wang Yong made similar remarks last March. Wang stated that in a grim economic situation, the SOEs "should identify risk points by improving management and alleviating the bleeding.”

A China Entrepreneurs commentator stated that SOEs are not the only ones that must prepare for a cold winter. “Private enterprises, especially mid to small companies, need to do a better job of preparing for winter. When a cold winter comes, these companies will be the hardest hit as their struggle is in the midst of the market.”

Xinhua, June 26, 2012
China Entrepreneurs, July 9, 2012