The Sunday Times published a story (paywall) on the weekend about China’s top 10 most powerful figures in the country’s state-owned business sector. The figures sit atop of a diverse range of business empires that have two major things in common: they are owned by the government, and hold a near monopoly in their industry. Several of the heads are also so-called princelings, the offspring of Communist revolutionaries that helped found modern-day China in the 1940s and whose families continue to wield enormous political power. In February 2011, Xinhua reported that the Chinese government directly controlled 121 companies worth roughly $3.65 trillion through the State-owned Assets Supervision and Administration Commission.
The jug of cooking oil may not occupy pride of place in your kitchen, but in China it has become an unlikely gauge of the country’s economy. The Financial Times and Wall Street Journal (subscriptions required) both reported Wednesday that a major producer of cooking oil in China, Wilmar International, had raised the retail price of its products by 5%.
A public spat in China this week between a top government body and an important industry has shed some light on the Communist Party’s inner workings. The reason? Cooking oil. Bear with me on this one.
In early December, the National Development and Reform Commission, China’s state economic planner, convened cooking oil producers in Beijing. The commission requested that producers increase cooking oil supplies in the run-up to next year’s Chinese New Year holiday – without lifting prices. Read the rest of this entry »