State Has Dragged Down China’s Economic Growth, Says Peterson Institute’s Lardy

The transcript discusses the economic strategies of the PBOC and Chinese authorities, focusing on the shift of credit towards state-owned enterprises and its impact on economic growth. It highlights the inefficiencies in state companies and the challenges faced by private firms. The mixed ownership reform is critiqued for its limited success. The discussion also covers the need for a competitive bond market to improve capital allocation, noting the preferential access state companies have over private firms.

What factors contribute to the inefficiency of state companies in utilizing capital?

In what ways could the bond market address concerns about the misallocation of financial capital?