China’s Worrisome Move into Nationalization through Consolidation

Amid much debate over the Chinese economy (e.g., generating another bubble, which is not restricted to China, of course), China’s move into nationalization is worrisome.

State-run Shandong Iron and Steel Group in China, the world’s eighth largest steelmaker, is reported to take a two-thirds stake in China’s leading privately-owned steel maker. This merger seems to signify a China’s backward move toward nationalization. China has privatized state-run enterprises since the late 1990s in an effort to become more globally competitive. This move also needs to be understood in the context of China’s political economy.