Not just tilting at windmills

THIS week Barack Obama decided to block a private Chinese company from buying a wind farm near an American military installation in Oregon. Regardless of the rights and wrongs of the president’s decision—and it does come suspiciously close to the American election—it fits into a pattern that should worry China’s businesspeople and rulers. In the West many of China’s best companies are treated with suspicion: Huawei, a telecoms giant, has been blocked from some markets in America, and a bid by CNOOC, a state oil firm, to buy Canada’s Nexen has raised a storm. And it is not just the West. The leaders of Myanmar, hardly democratic capitalists, have also turned against some Chinese firms (see article).

Behind this suspicion lies the perception—strengthened by the re-emergence of the country’s vast state-owned enterprises (SOEs)—that China’s businesses are too close to the Communist Party. Many in the regime believe the SOEs’ growth has helped China’s rise. The reverse is true: the SOEs have cashed in on China’s progress. Far more importantly, they now look sure to hinder it in the future.