Recalibrating the Governance of State-owned Capital: Making Sense of China’s New “State-owned Capital Investment and Operation Companies”

Abstract: The Xi Jinping administration has introduced two major governance reforms for the state sector, each with differing and even contradictory objectives: (i) enhancing Party control within state-owned enterprises (SOEs) by integrating Party committees into their governance structures; and (ii) transitioning from asset management to capital management, including reorganising state-owned holding groups into investment companies. While the literature often highlights Party control mechanisms, the transformation of holding groups into state-owned capital investment and operation companies (SCIOCs) has not been thoroughly examined. This article investigates SCIOCs within the broader historical context of China’s state sector governance, analysing the implications, risks and challenges of this novel governance framework.