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In: Economics

How state-owned enterprises performed as well as private firms in China?

How state-owned enterprises performed as well as private firms in China?

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Expert Solution

China's private sector is at present the main driver of economic growth but the Chinese government is still supporting State -owned enterprises and is trying best to make them  bigger, stronger as well as more efficient.The private sectors contribution to the Chinese economy is immense.It contributes 60%to GDP, 70%to innovation ,80% of urban employment and 90%exports.But the goverment is trying to make the SOE as efficient as private sectorThe sectors on which the government  has given  a lot of importance is defense ,energy, telecom,avaiation ,and railway system.In order to improve SOE's , steps have been taken like reorganizations,restructuring,and by increasing the standard of their internal governance.The government has introduced mixed ownership in telecom company , China Unicom ,by selling shares.This was done to generate more returns , but at the same time having state control over it .In 2015 , State owned enterprises contributed to 39%of GDP,and is trying to contribute more.


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