China Remains Firmly Committed to State-owned Enterprise System

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A headline editorial published by the economics flagship of China’s official news agency Xinhua reiterates Beijing’s ongoing commitment to the state-owned enterprise system in the form of a “Modern State Enterprise System with Chinese Characteristics.”

The editorial published in Economic Information Daily entitled “Reforming and Exploring a Modern State-owned Enterprise System with Chinese Characteristics” (改革探索中国特色现代国企制度) notes that a “modern state-owned enterprise system with Chinese characteristics” is one of the key concepts unveiled by President Xi Jinping since he assumed office at the 18th National Congress of the CCP in 2012.

According to the editorial the launch of the theory”fully affirms the historical position and real significance of state-owned enterprises in the development of China’s society and economy, establishes the guiding role of the party in state-owned enterprise development, as well as clarifies the future direction of state-owned enterprise in accordance with the path of market-based reform and development.”

“A modern state-owned enterprise system with Chinese characteristics firstly clarifies the importance of state-owned enterprises [that] have fortified the nation’s integrated strength and are a major force for protecting the common interests of the people.”

In addition to serving as a pillar for economic development, the editorial notes that China’s state-owned enterprise system also plays a critical role in shoring up the authority of the central government.

“Strengthening of party leadership and improvements to corporate administration must be unified, for the establishment of a modern state-owned enterprise system with Chinese characteristics.

“An extremely important reason that China’s state-owned enterprises have managed to obtain such huge accomplishments and possess such an important position is the continual leadership of the party…upholding party leadership and strengthen the establishment of the party is the honourable tradition of China’s state-owned enterprises.”

The editorial seeks to affirm the contribution of SOE’s to China’s economic development despite incessant criticisms.

“Over the long-term, the public has continually had doubts about state-owned enterprises, with “SOE low-efficiency theory” and “privatisation theory” at the beginning, to “SOE monopoly theory,” “competition for profits with the private sector” theory and “denationalisation theory” constantly in our ears.”

“Looking back on history since the establishment of a new China, and especially since reform and opening, China’s state-owned enterprises have obtained a string of striking accomplishments in terms of reform and development.”

President Xi Jinping repeatedly reaffirmed Beijing’s commitment to the state-owned enterprise sector last year, stating in a speech delivered at a national SOE reform symposium in July that “SOE’s are an integrated force for strengthening the nation and a key force for protecting the common interests of the people…[we] must…continually strengthen their vitality, influence and risk-resistance capability to protect and increase the value of state-owned assets.”

Xi subsequently said at an October work meeting that SOE’s were the “key pillar and force for the party’s implementation of governance and revival of the nation.”

“China’s state-owned enterprises have made a historic contribution to China’s economic and social development, scientific and technological progress, establishment of national defence and improvements to living standards. Their accomplishments are outstanding and undeniable.”

 

 

 

 

 

 

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