• TwoTigers24, New York
  • October 23, 2026

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In China, “zombie companies” generally means businesses that can no longer sustain themselves. They have lost money for years and owe more than their assets are worth. They survive mainly on government subsidies or renewed bank loans. They used to be mostly local state-owned companies or traditional manufacturers with excess capacity, including state-run steel and cement plants. Now many companies in emerging industries backed by Chinese Communist Party policies, such as electric vehicles and solar power, have also become zombies with help from local subsidies. Lists of these companies touch on highly sensitive financial risks, including bad bank loans, local government finances, jobs and social stability. Officials and financial institutions usually keep those lists confidential and rarely release them.

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Source: China Observer

Author

YNOT — Two Tigers Consulting From Building Bridges to Watching China About 15 years ago, I founded a small company called Two Tigers Consulting with a relatively simple idea: help American and Chinese businesses work together. At the time, China represented one of the greatest business opportunities in the world — a rapidly expanding economy, extraordinary manufacturing capabilities, and ambitious entrepreneurs eager to build relationships with American companies. Two Tigers Consulting was created to help bridge that gap. For a while, it worked. We attended trade shows, arranged meetings, and introduced companies across both cultures. But after one particularly promising trade show, several Chinese businesspeople we had met were reportedly arrested upon returning to China — apparently for traveling without proper authorization. That experience taught me something important: in China, being a successful entrepreneur doesn't necessarily mean being free to conduct business. As Xi Jinping consolidated power and the political environment shifted, we concluded the potential rewards of doing business in China no longer justified the risks. Rather than abandon our knowledge entirely, Two Tigers evolved into a platform for following, discussing, and analyzing developments inside China — its economy, political leadership, and increasingly complicated relationship with the United States. I want to make absolutely clear that I have tremendous respect for the Chinese people — their entrepreneurs, engineers, and workers are extraordinarily capable. But I also believe China's political system creates fundamental contradictions: enormous private fortunes can be accumulated, yet ultimate political authority remains firmly concentrated, making relationships based on mutual trust and predictable rules extremely difficult to sustain. Today, Two Tigers is an independent publication examining China's achievements, challenges, ambitions, and contradictions — where they intersect with the United States and the broader world. What began as a small business venture now attracts roughly 10,000 visits a day. Understanding China is no longer optional: what happens there affects businesses, economies, and people throughout the world. And that is why Two Tigers continues.

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