Countermeasures of zombie enterprises

Protect zombie companies. It will hinder what economist Schumpeter called "creative destruction", thus affecting long-term growth. Creative destruction refers to the redistribution of resources from declining enterprises and departments to growing enterprises and departments. This process is painful, but also necessary. In the manufacturing and retail industries in the United States, the increase in productivity is largely due to this redistribution.

Bankruptcy law is a powerful weapon against zombie enterprises. Bankruptcy law liquidates the weakest enterprises, and at the same time allows enterprises with potential viability to pay off part of their debts in order to start making profits again. Edward hale, a professor of economics, said that a bankrupt enterprise like General Motors may become a "new enterprise with renewed vitality" as long as it accepts bankruptcy reorganization.

Miao Wei, Minister of Industry and Information Technology, said at the National Conference on Industry and Information Technology that in 20 16, it is necessary to formulate and implement the overall plan for promoting industrial restructuring and disposing of "zombie enterprises", coordinate and introduce supporting measures, guide the "zombie enterprises" to withdraw smoothly, and actively promote subversive and strategic mergers and acquisitions. An authoritative person said in an interview with People's Daily that it is imperative to resolutely dispose of "zombie enterprises", unswervingly reduce excess capacity, let "zombies" be buried underground, and free up valuable physical resources, credit resources and market space.