Disturbing News from China
The Chinese government is deliberately hurting private businesses. From the WaPost report:
In the evolving world of Chinese capitalism, officials from Premier Wen Jiabao down have pledged to open the way to a new crop of entrepreneurs, encouraging them to create jobs and expand the economy even as many of the old state-owned companies disintegrate, deprived of the connections to government officials and finance that have sustained them for decades.
But the shutdown of Tieben, along with the slowing of other private projects around the country, has called into question just how far China is willing to go in allowing private capital to compete with state-run enterprises, and how far its central bureaucrats are willing to step back from their traditional role of picking who succeeds economically.
As the government tries to cool an overheated economy, it is tightening credit and cracking down on the sort of corrupt financial and land trading that has been an everyday part of doing business during China's period of swift growth. But the burden of these new policies appears to be falling disproportionately on private entrepreneurs.