Business

State-operated economy causing troubles again
by Martina Harvanova

Chinese market is facing problems again. The state-controlled economy is required to behave in the limits of the domestic laws that don't allow free enterprising. From one point of view, strong economy, the biggest producer of all goods and the greatest mark (Made in China), and from the other, conditions acting unfriendly to the evolution of the market and consequently of the public. The negatives of this kind of economy have emerged recently. Moreover, in an apparent way. China Eastern Airlines has refused an alliance proposal from the China National Aviation Corp., parent of Air China. CNAC also outlined a strategic alliance between Air China and China Eastern Airlines involving various systems of cooperation and mutual integration as well as sharing the route network and capacity, establishing frequent flyer programs etc. Shares of Air China dropped 11.8% to 8.70 Hong Kong dollars ($1.50) on Jan, 21st what makes investors worried about the possibly deteriorating financial situation connected with integration with a weaker rival. China Eastern Air Holdings said it could not respond to an offer from China National Aviation Corp as it wasn't complete and lacked some specifics. All the figures that were submitted by Air China, the claimant of the integration, however, may not be attractive to China Eastern Airlines' present investors. Those who didn't experience the situation of state-operated economy conceive the position of China only with difficulties. State just can't solve all the troubles in the society. Some of them must be handled by people, by common entrepreneurs who know how to run a business. To leave everything in the hands of state officials don't repay in most cases. The mentioned crisis is one of those.

related story: http://www.forbes.com/markets/economy/2008/01/21/china-eastern-cnac-markets-equity-cx_0121markets1.html

by Martina Harvanova for PocketNews (http://pocketnews.tv)

PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketNews is everyone's way of keeping in touch with the World.

posted by Blog TechSource @ 12:58 PM