Xiaojie Liu congratulated the authors on an interesting and intellectual study. He cautioned them, however, for stretching the conclusions regarding “state capitalism” too far, given the use of data that only covered listed A-share companies. He also questioned the implication that the Chinese government has the power to allocate credit via banks, pointing out that in fact the responsibility lies with the bankers, who are likely to allocate credit in line with market fundamentals, not government preferences. Liu also raised the possibility that private firms may actually want to borrow less than state-owned firms, either because of greater cash flows or fewer investment opportunities.
Fredrik Sjöholm echoed Liu's comments, emphasising the need for a discussion on the supply versus demand for loans, given that state companies are involved in different sectors of the economy that may require more loans and private firms may have access to credit from other sources,...