Thirty Years of Turbulence - Chinese Enterprises

作者：admin  点击次数：5  发布时间：2025-07-31

On the other hand, the centralized pricing system and unreasonable price comparisons have led to significant differences in the profit levels of various industrial sectors. The most typical example is that the cost profit margin of the oil industry is 100 times higher than that of the coal industry, resulting in uneven distribution of benefits, unfair competition, and mutual comparison. The investigation team also found that in the absence of a hard budget constraint system, pilot enterprises engaged in behaviors such as "withholding taxes and profits, arbitrarily sharing costs, and issuing bonuses and subsidies indiscriminately", resulting in a diminishing effect of the decentralization and profit sharing reform. The hierarchical management of finance has strengthened local interests, and "a few areas have begun to show signs of 'separatism', not only competing for profits, but also hindering horizontal economic connections". The chaotic phenomenon of competing for raw materials between urban and rural areas and regions, redundant construction, blind production, squeezing small out of large, and backward out of advanced has also developed. In foreign economic exchanges, there has also been a phenomenon of multiple heads competing with each other, and 'the profits falling into the fields of others'. In response to this situation, Deng Xiaoping promptly issued a warning.