On March 18, 2013, China Review News published an article criticizing the government for intervening in the market. “Because of the government’s interference in the market, inefficient central government enterprises can obtain low cost funds; because of the government’s interference in the market, enterprises that operate at a loss can gain profit in writing by availing themselves of government subsidies; because of the government’s interference in the market, inefficient companies have consumed China’s energy, thus accelerating the risk of a future crisis.”
The government’s distortion of prices has caused excess capacity, which present both a current and future long term risk to China’s economy. It means the failure of market allocations, resulting in even more government control.
Source: China Review News, March 18, 2013
http://www.zhgpl.com/doc/1024/7/2/7/102472794.html?coluid=53&kindid=0&docid=102472794&mdate=0318054412