Economics
China's State Enterprises Have to Pay Up
The government wants more dividends from its companies
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The Chinese are experts at letting important news slip out quietly. The latest example: a May 4 announcement made during annual bilateral talks with the U.S. that the SOEs will increase the amount of dividends they pay to their owner, the state.
Some 100,000 government-owned and -controlled enterprises use their favored status and ready access to cheap land, loans, and energy, to become ever more powerful. If they can hold onto most or all of their earnings, they can tighten their grip on the economy. If the central government can coax higher dividends out of them, it can better fund badly needed social programs—and weaken the SOEs as well.