China clashes with G20 business lobby group over support for state-owned companies
Disagreement over Beijing’s support for SOEs exposes fundamental divisions between China and world’s other leading economies
A rare open row has broken out between Beijing and an international business group affiliated with the Group of 20 over the role of state-owned enterprises, reflecting a fundamental division between China’s views and those of other major economies.
Business 20, an advisory group that represents the views of the private sector, last week issued a communique calling for an end to state-related competitive distortions, but the wording met with strong objections from a Beijing-backed business group.
On Friday, the China Council for the Promotion of International Trade, a semi-governmental trade advocacy group, insisted that the B20 proposal should not be submitted to G20 leaders at their next summit and demanded revisions to the sections covering state-owned enterprises (SOEs).
It claimed that the proposal had ignored concerns expressed by Chinese business delegates at a B20 meeting in Argentina on Friday, adding that it one-sidedly highlighted market distortions, excess capacity and corruption in the SOE sector.
G20 leaders will discuss the communique when they meet in Buenos Aires on November 30 and December 1, but the quarrel exposes the deep divisions between Beijing and other countries over the management of its state-owned behemoths.
It also casts a shadow over the future of the G20, which emerged as a new global governance platform after the 2008 financial crisis to give China and other emerging economies a seat at the table when the world’s economic future is at stake.
Although the world’s 20 biggest economies have often found it hard to agree upon binding targets or concrete action, up to now they have managed to voice a consensus on general principals such as promoting growth and employment despite the divisions the latest spat exposes.
