Beijing may currently favour megamergers when it comes to reform of state-owned enterprises, but at least one central bank adviser is suggesting a different approach to dealing with China’s lossmaking zombie companies.
In a column published in the Communist party mouthpiece People’s Daily on Thursday, Huang Yiping, a member of the People’s Bank of China monetary policy committee, recommended the creation of a government fund to aid employees who lose their jobs when zombie companies are shuttered.
“Placement of employees is a major and difficult point in dealing with zombie companies,” he writes. “The government should take care of finding work for employees so they can change tracks [from the public to private sector], ensuring they have a path forward for employment and safeguarding their livelihoods.”