State-owned enterprises of China

This is a list of state-owned enterprises of China. A state-owned enterprise is a legal entity that undertakes commercial activities on behalf of an owner government. Their legal status varies from being a part of government to stock companies with a state as a regular or dominant stockholder. There is no standard definition of a government-owned corporation (GOC) or state-owned enterprise (SOE), although the two terms are often used interchangeably. The defining characteristics are that they have a distinct legal shape and they are established to operate in commercial affairs.

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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.[1][2] 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.[3] As Jin et al wrote in 2022,[4]

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.

Communist Party branches within China's SOEs are the governing bodies which make important decisions and inculcate communist ideology.[5]: 14 

Significance

As of 2017, China has more SOEs than any other country, and the most SOEs among large national companies.[6] As of the end of 2019, China's SOEs represented 4.5% of the global economy[7] and the total assets of all China's SOEs, including those operating in the financial sector, reached US$78.08 trillion.[8]

State-owned enterprises accounted for over 60% of China's market capitalization in 2019[9] and generated 40% of China's GDP of US$15.97 trillion (101.36 trillion yuan) in 2020, with domestic and foreign private businesses and investment accounting for the remaining 60%.[10][11] Ninety-one (91) of these SOEs belong to the 2020 Fortune Global 500 companies.[12]

China's SOEs are at the forefront of global seaport construction, and most new ports built by them are done within the auspices of the Belt and Road Initiative.[13]

SOEs also invest in private enterprises.[5]: 217–218  From the perspective of these private enterprises, this form of partial state ownership is helpful in obtaining financing from banks, particularly as prompts banks to require less collateral.[5]: 21  Sometimes in investing in private enterprises, SOEs acquire enough shares to nationalize them.[5]: 218  Over the period 2018-2020, 109 publicly traded enterprises with more than $100 billion in collective total assets were nationalized in this way.[5]: 218 

According to academic Wendy Leutert, China's SOEs, "...contribute to central and local governments revenues through dividends and taxes, support urban employment, keep key input prices low, channel capital towards targeted industries and technologies, support sub-national redistribution to poorer interior and western provinces, and aid the state's response to natural disasters, financial crises and social instability."[6]

History of SOEs

During the Third Front construction campaign to develop heavy industry in China's interior regions, almost 400 state-owned enterprises were re-located from coastal cities to secret sites in the Chinese interior where they would be more protected in event of foreign invasion.[14]: 3 

SOE mergers have been routine since 2000.[15] Beginning in 2003 with Hu Jintao's administration, the Chinese government increasingly funded SOE consolidation, supplying massive subsidies and favoring SOEs from a regulatory standpoint.[5]: 217  These efforts helped SOEs to crowd out foreign and domestic private sector competitors.[5]: 217 

SOEs were major beneficiaries of China's stimulus program following the 2008 global financial crisis, which began a period where the private sector withdrew and the state-owned sector expanded.[5]: 216 

The pace of SOE mergers has increased under Xi.[15] The goals of China's current SOE mergers include an effort to create larger and more competitive national champions with a bigger global market share by reducing price competition among SOEs abroad and increasing vertical integration.[15]

Overall, China's focus on SOEs during the Xi era have demonstrated a commitment to using SOEs to serve non-market objectives and increasing Party control of SOEs[6] while taking some limited steps towards market liberalization, such as increasing mixed ownership of SOEs.[16] Along with increased mergers, promotion of mixed ownership, and management of state capital have continued; results have been mixed.[16]

According to Xi, "[T]he dominant role of state ownership cannot be changed, and the leading role of the state-economy cannot be changed."[5]: 217  In Xi Jinping Thought, the historical importance of state-owned enterprises is highlighted:[5]: 217 

[W]ithout the important material foundation that state-owned enterprises have laid for China's development over a long period of time, without the major innovations and key core technologies achieved by state-owned enterprises, and without state-owned enterprises' long-term commitment to a large number of social responsibilities, there would be no economic independence and national security for China, no continuous improvement in people's lives, and no socialist China standing tall in the East of the world.

Xi Jinping thought also emphasizes the role of SOEs as part of the dominant position of state ownership necessary for common prosperity.[5]: 223 

State Council (Central Government)

China Investment Corporation

SASAC of the State Council
For a more comprehensive list, see State-owned Assets Supervision and Administration Commission § Central SOEs.

As of 2022, SASAC oversees 97 centrally owned companies.[17] Companies directly supervised by SASAC are continuously reduced through mergers according to the state-owned enterprise restructuring plan with the number of SASAC companies down from over 150 in 2008.[18]

Ministry of Finance
Main article: Ministry of Finance of the People's Republic of China § As shareholder

Ministry of Education

Regional Governments

Governments below the national level operate portfolios of SOEs which operate both domestically and abroad.[17]

Anhui Province

Beijing Municipality

Chongqing Municipality

Gansu Province

Guangdong Province

Shenzhen City

Zhuhai City

Guangxi Zhuang Autonomous Region

Guizhou Province

Hebei Province

Heilongjiang Province

Hubei Province

Wuhan City

Liaoning Province

Shanghai Municipality

Shandong Province

Linfen City

Yantai City

As of 2019

Shanxi Province

Tianjin Municipality

Xinjiang Uyghur Autonomous Region

Zhejiang Province

Ningbo City

Hong Kong S.A.R.


See also

References
Library resources about
State-owned enterprises of China
  1. 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.
  2. 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. Retrieved January 8, 2020.
  3. "《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.
  4. 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.
  5. Marquis, Christopher; Qiao, Kunyuan (2022). Mao and markets the communist roots of Chinese enterprise. New Haven: Yale University Press. ISBN 978-0-300-26883-6. OCLC 1348572572.
  6. Pieke, Frank N; Hofman, Bert, eds. (2022). CPC Futures The New Era of Socialism with Chinese Characteristics. Singapore: National University of Singapore Press. p. 138. doi:10.56159/eai.52060. ISBN 978-981-18-5206-0. OCLC 1354535847.
  7. 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. Retrieved 2022-08-22.
  8. Tjan, Sie Tek (17 October 2020). "China State Firms' Assets grow even as the Government presses for lighter debt". Caixin. Retrieved 19 October 2020.
  9. Hissey, Ian (17 December 2019). "Investing in Chinese State-Owned Enterprises". insight.factset.com. Retrieved 15 March 2021.
  10. Tjan, Sie Tek (21 May 2020). "How reform has made China's state-owned enterprises stronger". www.weforum.org. Retrieved 19 October 2020.
  11. CBNEditor (18 January 2021). "China's GDP Breaches 100 Trillion Yuan Threshold after Posting 2.3% Growth in 2020, Disposable Income up 4.7%". China Banking News. Retrieved 13 April 2021.
  12. Tjan, Sie tek (18 August 2020). "The Biggest but not the Strongest: China's place in the Fortune Global 500". www.csis.org. Retrieved 19 October 2020.
  13. Shahab Uddin, Shanjida (2023). "Bangladesh and Belt and Road Initiative: Strategic Rationale". China and Eurasian Powers in a Multipolar World Order 2.0: Security, Diplomacy, Economy and Cyberspace. Mher Sahakyan. New York: Routledge. p. 132. ISBN 978-1-003-35258-7. OCLC 1353290533.
  14. Meyskens, Covell F. (2020). Mao's Third Front: The Militarization of Cold War China. Cambridge, United Kingdom: Cambridge University Press. ISBN 978-1-108-78478-8. OCLC 1145096137.
  15. CPC Futures The New Era of Socialism with Chinese Characteristics. Frank N. Pieke, Bert Hofman. Singapore: National University of Singapore Press. 2022. p. 140. ISBN 978-981-18-5206-0. OCLC 1354535847.{{cite book}}: CS1 maint: others (link)
  16. CPC Futures The New Era of Socialism with Chinese Characteristics. Frank N. Pieke, Bert Hofman. Singapore: National University of Singapore Press. 2022. p. 141. ISBN 978-981-18-5206-0. OCLC 1354535847.{{cite book}}: CS1 maint: others (link)
  17. CPC Futures The New Era of Socialism with Chinese Characteristics. Frank N. Pieke, Bert Hofman. Singapore: National University of Singapore Press. 2022. p. 137. ISBN 978-981-18-5206-0. OCLC 1354535847.{{cite book}}: CS1 maint: others (link)
  18. "China gives state firms $8 bln to combat slowdown". Reuters. November 28, 2008.
  19. "Zhōngguó bǎowǔ "wúcháng" shōugòu mǎgāng gāngtiěyè jiānbìng chóngzǔ tísù" 中国宝武“无偿”收购马钢 钢铁业兼并重组提速. 第一财经 (Yicai) (in Chinese (China)). Shanghai. 3 June 2019. Retrieved 18 June 2019.
  20. "关于方正东亚信托有限责任公司调整股权结构的批复" (in Chinese). CBRC. 4 November 2016. Retrieved 9 January 2017.
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