The changing political economy of central state-owned oil companies in China

Abstract

This research seeks to reconceptualise the process of marketizing central state-owned enterprises (CSOEs) in the Chinese petroleum industry by interpreting their institutional establishment and reconstruction, and the change in their institutional context. The enterprise reform of state-owned oil companies, and the partial market liberalization initiated in the 1980s, have not pushed the petroleum sector toward the trajectory of the neoliberal free market. On the contrary, the state’s ascendency has been reconsolidated, and the institutional practice adhered to has made market-shaping possible. The state’s role is not fixed; rather, it has varied following the marketization process of the CSOEs. The state has reconstructed its role to strengthen its authority in the market, using market mechanisms to effectively improve its power to construct a flexible economic governance structure. In such a structure, where the state and market have mutually shaped each other, the combination of the two seemingly conflicting concepts of marketization and economic security has, to some degree, fostered the development of state-owned oil companies and expanded the scale of their asset-holding. The paper contributes to the broader discussion of state-market relationships and the institutionalization of energy governance with regard to China’s integration into the global capitalist economy.