When a mix of Chinese privately owned and state-owned companies came together in August to buy shares in China Unicom’s $11.7bn offering, Beijing heralded it as another milestone for reform of country’s state-owned enterprises.

It certainly marks another step in the blurring of the line between private enterprises in China and SOEs. Sadly, the blurring is in the wrong direction. Rather than freeing up state enterprises to act more efficiently, the latest step move by Beijing is all about asking private companies to subsidise them.

“Mixed ownership will do little to change Unicom’s behaviour,” analysts at TS Lombard noted of China’s second-largest telecom wireless company. “On the contrary, it is the latest sign of the Chinese Communist party extending its influence over China’s private sector. SOE reforms suck resources from the private sector.” Moreover, the heavy hand of Beijing — and its obsession with control — is undermining solid economic performance as well as threatening financial stability.