Vested Interests Block Reform in China, Analysts Say

Vested interests that reach into the highest echelons of the Communist Party are blocking state sector reforms and driving overcapacity in China, according to analysts.

Overhauling China’s state industrial mechanisms has been high on the international agenda in recent months, with the U.S. and European Union hitting Chinese exports with tariffs and threatening to block China’s market economy status bid at the World Trade Organization (WTO) at the end of the year. China announced investment and financing reforms, as well as a fair competition review system.

Despite the positive rhetoric, change is being blocked by powerful interests that stretch as ...