Hunting Zombie Companies.docVIP

Hunting Zombie Companies 　　The final sentence has been written for the shutdown of zombie companies. The Central Economic Work Conference held in December 2015 vowed to resolve industrial overcapacity， wherein a crucial aspect for its success will be the restructuring of zombie companies. Most of those defunct companies will be shut down or reorganized within three years， said Zhang Yi， Chairman of the State-Owned Assets Supervision and Administration Commission of the State Council （SASAC）， at a meeting held in Beijing on January 15. 　　“Industrial overcapacity will not be thoroughly resolved， and economic restructuring will not be realized unless zombie companies are closed，” said Feng Fei， Vice Minister of Industry and Information Technology. “We can only make progress after we shut down enough zombie companies.” 　　 Three defects 　　U.S. economic commentator Peter Coy defined zombie companies as organizations that have no way to continue their operations， but have not gone through bankruptcy. These enterprises use bank loans or government funding to survive. 　　Feng also defined zombie companies as those that suffer losses for a long time， and therefore have no hope to make up for their arrears， but are nevertheless difficult to shut down. 　　“These companies are much like the zombies you see in horror films. They have lost their vitality， but are still hanging on due to ‘blood’ transfusions. Sometimes they are even quite harmful，” described Wang Jiang vividly. Wang is a research fellow at SASAC’s research center. 　　Undoubtedly， these inoperative companies will damage their industries and intensify potential risks in the macroeconomy. 　　Zombie companies produce no economic benefits but still consume a large amount of resources such as land， funds， energy and labor， reducing the efficiency of resource allocation and making it impossible for resources to be distributed to sectors of higher economic benefits. In Jinhua of east China’s Zhejiang Province， ther