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State-Owned Enterprise in China: Reform, Performance, and Prospects

Author

Listed:
  • Gary Jefferson

    (Brandeis University)

Abstract
State-owned enterprise reform in China has travelled a long and uneven road. Throughout, its key driver has been the introduction of competition across China’s transforming economy, both the surge of new forms of domestic ownership and the ever-expanding access to technology and business methods from abroad. By highlighting the commons/public-good character of China’s SOEs, this paper underscores the importance of a clear Coasian assignment of property rights and reduced transaction costs. The paper then reviews the three stages of the reform of China’s state sector over the past 30 years, drawing on the literature that describes the intentions, achievements, and shortcomings of China’s reform program. Finally, the paper reviews the 2015 reform Guidelines and the recent literature assessing these guidelines, including their intent to clearly distinguish between the public service and commercial mission of individual SOEs, so that state-owned firms can be more rigorously accountable to their fiduciary responsibilities. Arguably, the key issue for China’s successful SOE reform is whether successful reform of China’s state sector can be achieved at the firm level on a firm-by-firm basis or if, instead, it can only be achieved through deep institutional and political reform.

Suggested Citation

  • Gary Jefferson, 2016. "State-Owned Enterprise in China: Reform, Performance, and Prospects," Working Papers 109R, Brandeis University, Department of Economics and International Business School, revised Mar 2017.
    • Handle: RePEc:brd:wpaper:109r
    as

    Download full text from publisher

    File URL: http://www.brandeis.edu/economics/RePEc/brd/doc/Brandeis_WP109R.pdf
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    References listed on IDEAS

    as
    1. Bai, Chong-En & Li, David D. & Tao, Zhigang & Wang, Yijiang, 2000. "A Multitask Theory of State Enterprise Reform," Journal of Comparative Economics, Elsevier, vol. 28(4), pages 716-738, December.
    2. Chang-Tai Hsieh & Zheng (Michael) Song, 2015. "Grasp the Large, Let Go of the Small: The Transformation of the State Sector in China," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 50(1 (Spring), pages 295-366.
    3. repec:bla:etrans:v:10:y:2002-11:i:3:p:586-617 is not listed on IDEAS
    4. Chang-Tai Hsieh & Zheng (Michael) Song, 2015. "Grasp the Large, Let Go of the Small: The Transformation of the State Sector in China," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(1 (Spring), pages 295-366.
    5. Gary Jefferson & Thomas Rawski & Yifan Zhang, 2008. "Productivity growth and convergence across China's industrial economy," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 6(2), pages 121-140.
    6. Brandt, Loren & Van Biesebroeck, Johannes & Zhang, Yifan, 2012. "Creative accounting or creative destruction? Firm-level productivity growth in Chinese manufacturing," Journal of Development Economics, Elsevier, vol. 97(2), pages 339-351.
    7. Jefferson, Gary H, 1998. "China's State Enterprises: Public Goods, Externalities, and Coase," American Economic Review, American Economic Association, vol. 88(2), pages 428-432, May.
    8. North, Douglass C, 1994. "Economic Performance through Time," American Economic Review, American Economic Association, vol. 84(3), pages 359-368, June.
    9. Gary H. Jefferson & Thomas G. Rawski, 1994. "Enterprise Reform in Chinese Industry," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 47-70, Spring.
    10. Chang-Tai Hsieh & Zheng (Michael) Song, 2015. "Grasp the Large, Let Go of the Small: The Transformation of the State Sector in China," NBER Working Papers 21006, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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