Govt funds aimed at wrong targets

Yang Xue, a former government official in Guangdong Province, recently admitted to accepting nearly 3 million yuan ($483,000) in bribes from five enterprises between 2008 and 2013, according to local reports.

Chinese consumer electronics manufacturer TCL Corp is one of the companies that is said to have bribed Yang. In exchange for their money, according to Yang, TCL got nearly 80 million yuan in subsidies from the government.

This is not the first time in recent years that TCL has received large handouts from the government. In fact, the company reaped upwards of 2.2 billion yuan from authorities in 2013, a year when it reported 2.11 billion yuan in net profits.

TCL is also not the only listed company in China that would be operating in the red if not for the largesse of officials. As many are aware, local authorities have been known to funnel cash into listed companies in the name of supporting innovation. Such practices, unfortunately, open the door to corruption and weaken the competitive ability of local businesses.

If authorities want to support the development of innovative products and services, they should give subsidies to individual consumers and let the market decide which companies thrive.