On June 27, Qiushi Theory carried an opinion piece that was originally from Red Flag Manuscript. A research fellow at the Academy of Marxism of the Chinese Academy of Social Sciences wtote the article. The piece stated that, in the current economy, the development of the public sector part of the economy should take precedence over the non-public sector. It also raised the question as to what can be done to bring back the dominance and control of the declining State Owned Enterprises (SOEs).
According to the article, China’s economic model consists of the co-existence of public and non-public ownership. During the Party’s 16th National Congress, a proposal was made to extend an equal effort in developing both the public and non-public sectors of the economy. The author asserted, however, that these efforts can’t carry an equal weight. Rather, the development of the public sector of the economy should take priority over the non-public sector. The author stated, “The public sector of the economy provides the base and the guarantee that the people will be the masters in a socialist country. Allowing the public sector to dominate will determine the characteristics of the socialist system.”
At the end of the article, the author raised the question as to what can be done to protect the dominant status of the public sector of the economy and enable the SOEs to regain their dominant status. The GDP of SOEs dropped from 49.6 percent of total GDP in 1998 to 26.6 percent in 2010, while the GDP of the private sector increased from 3.1 percent to 30.5 percent in the same period and has thus surpassed SOEs.
Source: Qiushi Theory, June 27, 2012