State-Owned Enterprises
The role of SOEs in China's economy — commanding the heights while raising questions about efficiency and competition.
Commanding the Heights
China's state-owned enterprises are the backbone of what scholars call 'state capitalism.' SOEs dominate strategic sectors: banking (the 'Big Four' state banks hold over $17 trillion in assets), energy (Sinopec, CNPC, CNOOC), telecommunications (China Mobile, China Telecom, China Unicom), defense, transportation, and heavy industry. The 97 centrally managed SOEs under the State-Owned Assets Supervision and Administration Commission (SASAC) had combined assets exceeding $30 trillion in 2023.
The principle is explicit: the Party retains control over the 'commanding heights' of the economy while allowing private enterprise in consumer-facing sectors. Deng's reform formula, refined by subsequent leaders, was 'grasp the large, release the small' — keep big strategic SOEs under state control while allowing smaller state firms to be privatized or go bankrupt.
