The Latest Round of China’s State-owned Enterprise Reforms: Grasping the Large and Releasing the Small?
38 Pages Posted: 3 Oct 2023
Date Written: May 27, 2023
Abstract
Despite the remarkable economic growth, China maintains a large-scale State economy comprised of extensive State-owned enterprises (SOEs) that continue to play a dominant role in the national economy. In spite of this, China has been substantially restructuring its State economy in its long-lasting SOE reforms since 1978, and the fourth round of the reforms commenced in 2013. China's expanding geopolitical influence and escalating Sino-Western tensions warrant an in-depth examination of its genuine State economy reform objective and process. Based on comprehensive analyses of relevant laws and policies of China’s major State economy restructuring programs promoted in the second and the latest round of the reforms, this article firstly demonstrates SOE's well-established primacy in China’s political-economic system. Despite the implementation of the 'Grasp the Large and Release the Small' pseudo-privatisation programme in the mid-1990s, the program's objective was to revitalise rather than weaken China’s State economy. In the latest round of SOE reforms, China continues to 'Grasp the Large and Release the Small' to strengthen its State economy. This article finally argues that this policy continuity speaks to a goal that successive Chinese leaders have sought to achieve—fostering a stronger State economy driving the national economy and future prosperity.
Keywords: State-owned enterprise, China's State-owned enterprise reforms, Privatisation, Policy continuity, State sectors, Socialist market economy, State ownership
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