This book has a mission: to show that a second revolution in state-owned enterprise (SOE) reform is urgently needed. To that end, the authors muster all the firepower they can. The most compelling (and most prominently presented) two arguments are that (1) once one adjusts SOE profits for all the indirect subsidies SOEs enjoy, SOEs are a consistently loss-making bunch; and (2) once one properly accounts for the distribution of SOE value-added, the large-scale plundering of SOEs by managers and employees becomes apparent.
Both authors are affiliated with the Unirule Institute of Economics (Tianze jingji yanjiusuo)—an “independent think tank,” its website says—and the book is the outcome of a project undertaken by a “task group” that also includes Yang Junfeng, Qian Pu, Guan Jianqiang, and Yang Xiaojing. The task group looked for (and provides) answers to three questions: (1) What is the current performance of the SOEs? (2)...
