Question

Why might state-owned companies that China's government ordered to buy more shares to help boost returns have been equally likely to have later earned either higher or lower returns? Explain your reasoning.

Short answer

The role of SOEs has become all the more important in these circumstances, as they need traditionally assistedthe govt in reforms

Step-by-step solution

Given Information

Information Allowing market forces to have had a stronger role in capital allocation over duration. the case with China’s state-owned enterprises (SOE), however, is more complex than with the overall economic picture. Markets are influenced to have such a stronger role in capital allocation over term. . the case with China’s state-owned enterprises (SOE), however, is more complex than with the overall economic picture.

Explanation

In light of the changing global landscape and also the Fourth age, China is transitioning from an investment-driven export economy to an innovation-driven economy reliant on domestic consumption. The role of SOEs has become all the more important in these circumstances, as they need traditionally assisted the govt in reforms - while the new consumption-oriented economy requirestier of flexibility and responsiveness that publicly owned bodies generally lack.