The State Administration for Industry and Commerce plans to introduce fair competition reviews to its industrial policy, Reuters reported, citing state media. Xinhua quoted the administration’s chief Zhang Mao as saying the move will create a more open and transparent regulatory environment for the market and will help reduce interventions by the government that created “unfair competition.” Currently many Chinese firms suffer from narrow profit margins that are lower than their cost of capital, discouraging investment. Many blame distorted capital markets for the phenomenon, which keeps many inefficient, state-backed companies afloat with cheap credit while denying it to more dynamic private competitors.
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