China’s New Push to Reform the State Sector: Progress and Drawbacks

There have been high expectations for renewed reforms of China’s numerous and hugely diverse state-owned enterprises (SOEs). Directed by two important documents of top-level design, the reform plan incorporates useful policy elements, such as allowing the market to play a larger role and making the shift from asset to capital management, all of which demonstrate a move in the right direction. However, many issues, especially the role of the Party and SOE monopoly, remain unsolved and need to be further illuminated. Nevertheless, encouraging progress has been made via pilot programmes and local experiments in areas such as mixed ownership reforms and making the shift to capital management.