China creates new giant state-owned enterprises

The biggest economic theme in China over the next six to 12 months is likely to be “a surge in domestic mergers and acquisitions”, says David Millhouse for Bloomberg View. With the authorities already curbing “irrational” overseas acquisitions by Chinese firms, the next step is likely to be consolidation of state-owned enterprises (SOEs), especially in key sectors such as coal, power, heavy equipment manufacturing and steel. The mega-deals are already underway: China Cosco Shipping offered $6.3bn for Orient Overseas International in July, for example.

Getting these reforms right is vital, says The Economist. In [...]