Washington, D.C. Oct 26, 2011. The U.S.-China Economic and Security Review Commission released a new report, “An Analysis of State-owned Enterprises and State Capitalism in China.”
China’s breathtaking economic growth, has often led observers to assume that the country’s economic system has been transformed into a capitalist economy dominated by private enterprise. Although China’s reliance on private enterprise and market-based incentives has been growing, and the CCP’s treatment of private enterprises and entrepreneurs has been changing, it would be a mistake to minimize the current role of the State and the CCP in shaping economic outcomes in China and beyond. The Chinese government and state-owned enterprises (SOEs) remain potent economic forces. Indeed, some of China’s SOEs are among the largest firms in China and the world. They are major investors in foreign countries. They have been involved in some of the largest initial public offerings in recent years and remain the controlling owners of many major firms listed on Chinese and foreign stock exchanges.
Previous reports and analyses by academics and policy experts have estimated that Chinese SOEs, and other state-affiliated enterprises, hold a lower share of China’s non-agricultural GDP than that estimated in this report, which provides a comprehensive analysis of that country’s control and influence over its economic enterprises. This report tracks testimony heard by the Commission that China’s privatization reforms have, in some cases, reversed and that the state sector is strengthening.