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Study Times: China Should Create State Enterprises

Study Times republished an article from Beijing Youth Daily arguing that China should create a number of state enterprises. According to the author, state enterprises are different from State-Owned Enterprises (SOEs). The latter are companies that the government owns, but state enterprises are companies, whether private or state-owned, that are a symbol of the country or that represent its country in certain industries.

For example, Samsung is the state enterprise of South Korea, Daimler AG is of Germany, and Apple and Google are of the U.S. The author suggested that Huawei (an IT industry) and the newly formed CRRC Corp. (in the railway industry) are the two best candidates to become state enterprises of China, as they are both strongly competitive in their fields. Huawei also needs the government’s backing to compete in the international market and to deal with other governments.

As a result of their monopoly positions, many large SOEs, such as those in the oil, electricity, and banking industries, have substantial revenues and a large market share in China. However, they do not have the ability to compete in global markets, and thus cannot become state enterprises in a real sense.

Source: Study Times, January 19, 2015