Business environment improves, net state assets rise

Chinese authorities this week announced new regulations that promise to cut red tape and level the playing field for different types of firms from 1^st January. But the policies are at odds with the government’s industrial policy which favours domestic firms. If anything, the trade war is encouraging officials to devote more resources to becoming self-sufficient in key products and therefore less reliant on foreign firms. Meanwhile, new data shows that the net assets of the government and state-owned firms increased by 5% y/y in 2018. But the rise in net assets in 2018 is likely to be partially reversed this year as officials are already making using of this additional policy space.