The latest round of China’s state-owned enterprise reforms: the state advances, the private sector retreats?

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 study firstly demonstrates SOE’s well-established primacy in China’s political-economic system. This study argues that since the mid-1990s, the restructuring reforms implemented by successive Chinese governments for the State economy have promoted the ‘Grasp the Large and Release the Small’ pseudo-privatisation. The policy continuity speaks to a goal that successive Chinese leaders have sought to achieve—’the State advances, the private sector retreats’.