What can China learn from Mayer's book, deeply rooted in the West as it is?

Mayer's answer, to put it simply, is China should avoid the faults made by the West. A Western corporation style does not need to be blindly pursued. Credible long-term investors should be incorporated to ensure a corporation's long-term prosperity. However, the question is, who or what can take the place of the State as a long-term investor?

Mayer said there are many options, including many financial institutions such as pension and insurance funds. The problem in China, however, is that pension funds have the direct or indirect involvement of the State. But he added that "there is no reason" not to incorporate foreign private pension funds as co-investors to counterbalance the influence of the State. In South Korea, for example, the National Pension Scheme is an owner of the chaebol, a form of business conglomerate.

Mayer said although State operations always mean low efficiency, privatization is not a one-size-fits-all solution either. Britain's history provided considerable experience in this respect.

"Britain's privatization of the railways has not been a happy experience at all," Mayer said. "Many people question whether the privatization of the railways actually delivered any benefits because they did not see a clear and great improvement in efficiency. What is quite clear though is there has been a substantial increase in ticket prices."

In Britain, the railways were initially, as they were in China, administered by the government. They then became state-owned enterprises before, after the late Margaret Thatcher's premiership from 1979 to 1990, being fully privatized and sold off. Not only the trains but also the tracks were privatized. Railtrack behaved like many a private commercial company, cutting costs where it could, including maintenance fees. After two serious accidents occurred, Railtrack was taken out of straightforward private ownership and became mutually owned by a number of interested parties. In many respects it is considered to be the least successful privatization program in Britain.

According to Mayer, the lack of success partly lies in the nature of the sector: It is very difficult to introduce competition in the railway sector because trains are run on a limited number of tracks. In contrast, it is relatively easy to introduce competition in the airline sector. Allowing state-owned airlines to compete with private airlines proved to be beneficial to customers. For example, competition forced British Airways, a state-owned enterprise to become a very successful company.