The anticipated megamerger of ChemChina and Sinochem implies there is a common thread linking China’s planned economy and countries with freer markets. China says it wants to reduce production capacity. Takeovers in mature industries in Europe and the US often have the same motive. But it would be a mistake to pursue parallels too far.

An implicit aim of some consolidators in the west is to remove capacity so as to raise prices. Antitrust watchdogs may try to block aggressive efforts to reduce competition, but deal doers still pray that better pricing will lift margins, in tandem with cost cutting. That should be easier in basic industries such as steel, aluminium and chemicals. China has a lot of these, but it may balk at tightening output to raise prices, preferring to subsidise output that cannot make a decent return.

Chinese media has been extolling government efforts to cut capacity. Easy to envisage the combination of ChemChina and Sinochem to create a group with sales of some $100bn as part of that plan, alongside a rumoured mash-up of state energy groups.