Skip to main content
main-content

Über dieses Buch

This book focuses on the nature and significance of China’s state enterprises which have undergone substantial changes since China’s economic liberalization in 1978. It argues that much of the criticism is based on mistaken premises, where even the term ‘state-owned enterprises’ is a misnomer given that the emphasis is much less on ownership than on control. Using numerous case studies, this book highlights the extent to which these enterprises have evolved in response to reforms, and provides an in-depth analysis of their role in China’s outward investment strategy in the “Belt and Road” initiative. This role speaks to their growing influence as China expands her global footprint.

Inhaltsverzeichnis

Frontmatter

Chapter 1. Introduction

Abstract
China’s reemergence has been the economic story of the twentieth century. This rise as well as the manner of its rise led by the state and its enterprises has invited much debate. This success has created a paradox given the mainstream economic narrative of inefficient state enterprises. In seeking an explanation, this chapter finds support from even Western scholars who argue for a strong role of the state in a mixed economy and from political economy arguments relating to the legitimacy of the ruling party. State enterprises’ continued role lies in their evolution from the traditional provision of social safety nets to that of supporting state strategy, the product of incremental reforms implemented over several decades. This introduction frames the discussion in later chapters.
Ran Li, Kee Cheok Cheong

Chapter 2. China’s State Enterprises—Theories and Evidence

Abstract
Despite extensive writing, there is little agreement on how state enterprises have performed. This is partly because enterprises had gone through several phases of reform. Also, most studies have been framed by Western theories of public enterprise, and conclusions were drawn assuming these theories hold. This chapter deals with both mainstream and alternative theoretical perspectives applied to Chinese state enterprises and empirical evidence of their performance. Mainstream theories discussed are agency theory, property rights, public choice, and neoliberalism. Alternative theories discussed are Minsky’s financial instability hypothesis, economic embeddedness, market socialism, and the developmental state. Additionally, characterization of China as a civilization state speaks to the importance of historical factors in explaining the state’s attitude toward state enterprises.
Ran Li, Kee Cheok Cheong

Chapter 3. State Enterprises, Economic Growth, and Distribution

Abstract
A major criticism of Chinese state enterprises is their poor performance with the solution being privatization and/or liquidation. This view assumes first the superiority of private sector performance and second a clear distinction between public and private enterprise. This chapter argues that these assumptions are incorrect. Instead the state has a vital role to play in the economy, and in any case the distinction between private and private enterprises are not at all sharp. The recounting of state enterprise reforms ends with typologies of state enterprises today. Evidence also shows that reforms have strengthened governance and performance, while divestiture and consolidation has produced fewer but larger and stronger state enterprises. While the enterprise-economic growth link is not easily established, the enterprise-income distribution has been perverse as state enterprises cease providing social protection.
Ran Li, Kee Cheok Cheong

Chapter 4. The State’s Role in a Strategic Industry—China’s Banking Sector

Abstract
China’s state-owned banking sector’s designation as a strategic sector has seen it experiencing a slower pace of reforms compared with non-financial state enterprises. The reasons for this divergence are historical, being rooted in China’s unhappy experience during the early years of its modern banking history. This chapter charts China’s turbulent banking history, and reviews how the sector responded to the state’s reform policies. Major policies and external circumstances impact the performance of China’s state-holding banks. The major policies are China’s entry into the World Trade Organization in 2001 and the state’s decision to expand its global role around the same time. The external development discussed is the onset of the Global Financial Crisis in late 2008. Some concluding remarks about this sector are offered.
Ran Li, Kee Cheok Cheong

Chapter 5. China’s “Commercial” State Enterprises—A Case Study of ZTE Corporation

Abstract
Because state enterprises come from different levels of government and have varying degrees of state participation, the important question arises as to what “state enterprise” means in the Chinese context. The answer can best be found at the enterprise level. A major state enterprise in the electronics sector, ZTE Corporation, is chosen for analysis. This chapter traces how state enterprise reform progressively yielded a reduction of state ownership with the loss of state control, shows how this control was exercised lightly, and how pursuit of and/or compliance with state strategies have benefited the enterprise. The enterprise’s operations also speak specifically to how issues like agency costs are handled in Chinese enterprises and generally to areas of divergence between Chinese governance and governance as commonly understood.
Ran Li, Kee Cheok Cheong

Chapter 6. “Going Out”, Going Global, and the Belt and Road

Abstract
Since liberalization in 1978, China has been a major destination for foreign direct investment. This changed after 1990 when the Chinese government encouraged Chinese enterprises to expand overseas. Factors driving this internationalization included the government’s objective of playing a larger international role and strengthening the international competitiveness of Chinese enterprises. State enterprises were the first to respond. This chapter describes the process of “going out” and the twin objectives of state enterprises to support the government’s strategy of extending its influence and to seek markets. The Bank of China’s expansion in Malaysia illustrates the first objective, ZTE’s internationalization the second. The recently launched Belt and Road Initiative will see an expanded role for Chinese state enterprises.
Ran Li, Kee Cheok Cheong

Chapter 7. Conclusion

Abstract
This final chapter draws together the many strands that course through the prior discussion of state enterprises. These strands set the Chinese situation apart from the prevalent critiques of the Chinese state and its enterprises. These strands are, first, the prominence of the state in society; second, many state enterprises being state controlled rather than owned; third, the blurred distinction between state and non-state enterprises; fourth, listed state enterprises operating according to commercial principles and are profitable; and finally, state enterprises’ important role in the government’s internationalization efforts. Taken together, these points suggest that the use of Western theory to assess China’s state enterprises fails both on account of flawed assumptions and characterization. Hence, any assessment should be grounded on what its role actually is.
Ran Li, Kee Cheok Cheong

Backmatter

Weitere Informationen

Premium Partner

    Bildnachweise