On March 30, 2012, Qiushi, a journal of the Central Committee of the Chinese Communist Party (CCP), reprinted an article from http://www.chinareform.org.cn/ titled “The Key to Reform Is to Distinguish State-Owned Enterprises from Public Sector Enterprises.” The article differentiates State-Owned Enterprises from Public Sector Enterprises. According to the author, state-owned enterprises refer to those enterprises in key industries (such as energy, IT, manufacturing, etc.) that, in Western free market economies, would commonly be private enterprises, while public sector enterprises refer to those in non-competitive industries which private entrepreneurs would find unprofitable. The article says public sector enterprises are common to both socialist and non-socialist countries, while the state-owned enterprises are unique to socialist countries.
According to the article, state-owned enterprises are a socialist symbol with Chinese characteristics and the economic foundation of the CCP, the ruling Party. Therefore, the CCP’s ruling position requires that it must maintain state-owned enterprises. Although China should have public sector enterprises based on the state capitalist enterprise system, just like other countries, China must keep state-owned enterprises with socialist characteristics.
The article concludes that the fundamental problem that socialist economic system reform must seriously study and resolve is how to enable state-owned enterprises and public sector enterprises to coexist and develop.
Source: Qiushi, March 30, 2012