Recently, the media has investigated into the operation costs of 53 enterprises that spread over two provinces and four cities, the result shows that the costs on monopolized sectors such as water, electricity, gas and transport remain stubbornly high and the outlook is not optimistic.

In certain franchising sectors, the situation is worse.

ANBOUND's research team is of the view that the Chinese government has not done enough to reduce the burdens of the enterprises, particularly the high institutional costs borne by the enterprises, of which electricity cost is the most obvious example.

As a result, it is now even harder for the enterprises to survive and to compete; the recovery of manufacturing sector will be even harder.

In the future, China should break monopoly and separate government administration from business management through a truly market-oriented reform in order to allow the government to give back to the people by reducing the institutional costs.