A state-owned enterprise (SOE) is a business entity created or owned by a national or local government, either through an executive order or legislation. SOEs aim to generate profit for the government, prevent private sector monopolies, provide goods at lower prices, implement government policies, or serve remote areas where private businesses are scarce. The government typically holds full or majority ownership and oversees operations. SOEs have a distinct legal structure, with financial and developmental goals, like making services more accessible while earning profit (such as a state railway). They can be considered as government-affiliated entities designed to meet commercial and state capitalist objectives.
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π State-owned enterprises in the context of List of the largest companies of China
This article lists the largest companies in China in terms of their revenue, net profit and total assets, according to the American business magazines Fortune and Forbes. In 2022, Fortune's Global 500 list of the world's largest corporations included 145 Chinese companies in total. Over the same year, Forbes reported that three of the world's ten largest public companies were Chinese, including the world's largest bank by total assets, the Industrial and Commercial Bank of China. Many of China's largest companies are state-owned enterprises, due to the significant presence of the Chinese government in the national economy.
In this Dossier
- β Core Definition: State-owned enterprises
- π State-owned enterprises in the context of List of the largest companies of China
- State-owned enterprises in the context of Municipally owned corporation
- State-owned enterprises in the context of State-owned enterprises of China
- State-owned enterprises in the context of State capitalism
State-owned enterprises in the context of Municipally owned corporation
A municipally owned corporation is a corporation owned by a municipality. They are typically "organisations with independent corporate status, managed by an executive board appointed primarily by local government officials, and with majority public ownership." Some municipally owned corporations rely on revenue from user fees, distinguishing them from agencies and special districts funded through taxation. Municipally owned corporations may also differ from local bureaucracies in funding, transaction costs, financial scrutiny, labour rights, permission to operate outside their jurisdiction, and, under some circumstances, in rights to make profits and risk of bankruptcy.
The causes and effects of municipally owned corporations are posited to be different from those of state-owned enterprises. Corporatization may be more utilised locally rather than nationally allowing more hybrid or flexible forms of public service delivery such as public-private partnerships and inter-municipal cooperation. It also allows charging user fees. Effects can be different because of lower regulator expertise, lower contracting capacity for municipalities, and the higher presence of scale economies. Current research shows that municipally owned corporations are frequently more efficient than bureaucracy but have higher failure rates because of their legal and managerial autonomy. An additional problem is the fact that municipally owned corporations often have more than one municipal owner, and conflict between municipal owners can lead to reduced output for the municipally owned corporation due to various negative spillovers.
State-owned enterprises in the context of State-owned enterprises of China
A state-owned enterprise of the People's Republic of China (Chinese: ε½ζδΌδΈ) is a legal entity that undertakes commercial activities on behalf of an owner government.
As of 2017, the People's Republic of China has more state-owned enterprises (SOEs) than any other country, and the most SOEs among large national companies. As of the end of 2019, China's SOEs represented 4.5% of the global economy and the total assets of all China's SOEs, including those operating in the financial sector, reached US$78.08Β trillion.
State-owned enterprises in the context of State capitalism
State capitalism is an economic system in which the state undertakes business and commercial economic activity and where the means of production are nationalized as state-owned enterprises (including the processes of capital accumulation, centralized management and wage labor). The definition can also include the state dominance of corporatized government agencies (agencies organized using business-management practices) or of public companies (such as publicly listed corporations) in which the state has controlling shares. The term has been used as a pejorative by Marxists, liberals and neoliberals. However, it has also served as a programmatic label for developmentalist and neomercantilist projects in reaction toimperialism.
A state-capitalist country is one where the government controls the economy and essentially acts as a single huge corporation, extracting surplus value from the workforce in order to invest it in further production. This designation applies regardless of the political aims of the state, even if the state is nominally socialist. Some scholars argue that the economy of the Soviet Union and of the Eastern Bloc countries modeled after it, including Maoist China, were state capitalist systems, and Eastern and Western commentators alike assert that the current economies of China and Singapore also constitute a mixture of state-capitalism with private capitalism.