State-owned enterprises of China

A state-owned enterprise of China (Chinese: 国有企业) is a legal entity that undertakes commercial activities on behalf of an owner government.

As of 2017^[update], China has more SOEs than any other country, and the most SOEs among large national companies.^[1]^{[page needed]} As of the end of 2019, China's SOEs represented 4.5% of the global economy^[2] and the total assets of all China's SOEs, including those operating in the financial sector, reached US$78.08 trillion.^[3]

State-owned enterprises accounted for over 60% of China's market capitalization in 2019^[4] and estimates suggest that they generated about 23-28% of China's GDP in 2017 and employ between 5% and 16% of the workforce.^[5] Ninety-one (91) of these SOEs belong to the 2020 Fortune Global 500 companies.^[6] Almost 867,000 enterprises have a degree of state ownership, according to Franklin Allen of Imperial College London.^[7]

The role of the Chinese Communist Party (CCP) in SOEs has varied at different periods but has increased during the Xi Jinping administration, with the CCP formally taking a commanding role in all SOEs as of 2020.^[8]^[9] For example, Lai Xiaomin, the former president of state-owned China Huarong Asset Management announced in 2015 that during the operation of China Huarong Asset Management, the embedded CCP committee will play a central role, and party members will play an exemplary role.^[10] As Jin et al. wrote in 2022,^[11]

The overarching principle of SOE reform is to firmly implement the Party’s leadership and the modern enterprise system. This principle creates a political governance system in China’s SOEs—a Party-dominated governance system characterized by Party leadership, state ownership, Party cadre management, Party participation in corporate decision-making, and intra-Party supervision.

CCP branches within China's SOEs are the governing bodies which make important decisions and inculcate its ideology.^[12]

^ Pieke & Hofman 2022.
^ Wei, Lingling (2020-12-10). "China's Xi Ramps Up Control of Private Sector. 'We Have No Choice but to Follow the Party.'". The Wall Street Journal. ISSN 0099-9660. Archived from the original on 2022-08-21. Retrieved 2022-08-22.
^ Tjan, Sie Tek (17 October 2020). "China State Firms' Assets grow even as the Government presses for lighter debt". Caixin. Archived from the original on 7 January 2022. Retrieved 19 October 2020.
^ Hissey, Ian (17 December 2019). "Investing in Chinese State-Owned Enterprises". insight.factset.com. Archived from the original on 18 April 2021. Retrieved 15 March 2021.
^ Zhang, Chunlin (15 July 2019). "How Much Do State-Owned Enterprises Contribute to China's GDP and Employment?" (PDF). World Bank. Archived (PDF) from the original on 13 August 2023. Retrieved 22 April 2024.
^ Tjan, Sie tek (18 August 2020). "The Biggest but not the Strongest: China's place in the Fortune Global 500". Center for Strategic and International Studies. Archived from the original on 7 October 2020. Retrieved 19 October 2020.
^ "Xi Jinping really is unshakeably committed to the private sector". The Economist. July 11, 2024. ISSN 0013-0613. Retrieved 2024-07-13.
^ Drinhausen, Katja; Legarda, Helena (15 September 2022). ""Comprehensive National Security" unleashed: How Xi's approach shapes China's policies at home and abroad". Mercator Institute for China Studies. Archived from the original on 8 February 2023. Retrieved 15 February 2023.
^ Wang, Orange; Xin, Zhou (January 8, 2020). "China cements Communist Party's role at top of its SOEs, should 'execute the will of the party'". South China Morning Post. Archived from the original on January 8, 2020. Retrieved January 8, 2020.
^ "《中国华融党委书记、董事长赖小民赴广东分公司调研强调全系统要总结、学习、推广"广东经验"助推中国华融转型发展》". Archived from the original on 2020-08-27. Retrieved 2020-08-26.
^ Jin, Xiankun; Xu, Liping; Xin, Yu; Adhikari, Ajay (2022). "Political governance in China's state-owned enterprises". China Journal of Accounting Research. 15 (2): 100236. doi:10.1016/j.cjar.2022.100236. S2CID 248617625.
^ Marquis & Qiao 2022, p. 14.

[FOOTNOTEPiekeHofman2022-1] Pieke & Hofman 2022.

[2] Wei, Lingling (2020-12-10). "China's Xi Ramps Up Control of Private Sector. 'We Have No Choice but to Follow the Party.'". The Wall Street Journal. ISSN 0099-9660. Archived from the original on 2022-08-21. Retrieved 2022-08-22.

[3] Tjan, Sie Tek (17 October 2020). "China State Firms' Assets grow even as the Government presses for lighter debt". Caixin. Archived from the original on 7 January 2022. Retrieved 19 October 2020.

[4] Hissey, Ian (17 December 2019). "Investing in Chinese State-Owned Enterprises". insight.factset.com. Archived from the original on 18 April 2021. Retrieved 15 March 2021.

[5] Zhang, Chunlin (15 July 2019). "How Much Do State-Owned Enterprises Contribute to China's GDP and Employment?" (PDF). World Bank. Archived (PDF) from the original on 13 August 2023. Retrieved 22 April 2024.

[6] Tjan, Sie tek (18 August 2020). "The Biggest but not the Strongest: China's place in the Fortune Global 500". Center for Strategic and International Studies. Archived from the original on 7 October 2020. Retrieved 19 October 2020.

[7] "Xi Jinping really is unshakeably committed to the private sector". The Economist. July 11, 2024. ISSN 0013-0613. Retrieved 2024-07-13.

[merics222-8] Drinhausen, Katja; Legarda, Helena (15 September 2022). ""Comprehensive National Security" unleashed: How Xi's approach shapes China's policies at home and abroad". Mercator Institute for China Studies. Archived from the original on 8 February 2023. Retrieved 15 February 2023.

[wang202-9] Wang, Orange; Xin, Zhou (January 8, 2020). "China cements Communist Party's role at top of its SOEs, should 'execute the will of the party'". South China Morning Post. Archived from the original on January 8, 2020. Retrieved January 8, 2020.

[10] "《中国华融党委书记、董事长赖小民赴广东分公司调研强调全系统要总结、学习、推广"广东经验"助推中国华融转型发展》". Archived from the original on 2020-08-27. Retrieved 2020-08-26.

[jin222-11] Jin, Xiankun; Xu, Liping; Xin, Yu; Adhikari, Ajay (2022). "Political governance in China's state-owned enterprises". China Journal of Accounting Research. 15 (2): 100236. doi:10.1016/j.cjar.2022.100236. S2CID 248617625.

[FOOTNOTEMarquisQiao202214-12] Marquis & Qiao 2022, p. 14.

[1]

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

[10]

[11]

[12]