China’s state-owned enterprises as agents of party and state power

Abstract

State-owned enterprises (SOEs) have remained a central pillar of the CPC ever since the founding of the People’s Republic of China and provided an effective medium for political socialization and mobilization. However, the role of SOEs had waned as the influence of private enterprises grew in the post-reforms era; the private sector’s ability to introduce breakthrough technologies left China’s SOEs looking obsolete. Nevertheless, over the period of the last decade or so, the influence and role of SOEs have been on the rise again with the CPC working at overcoming the shortcomings of SOEs and investing energy in optimizing the distribution of state-owned capital around transformation and upgrading of state-owned assets and improving their efficiency. The CPC’s attempts to turn around SOEs in terms of improving their management and R&D spends have several implications for how China and Chinese companies will operate and be viewed abroad.