Disclaimer:
This research report was prepared at the request of the Commission to support its deliberations. Posting of the Report to the Commission's website is intended to promote greater public understanding of the issues addressed by the Commission in its ongoing assessment of U.S.-China economic relations and their implications for U.S. security, as mandated by Public Law 106-398 and Public Law 108-7. However, it does not necessarily imply an endorsement by the
Commission or any individual Commissioner of the views or conclusions expressed in this commissioned research report.
liabilities and rights of investors holding SOE shares on behalf of the state and the responsibility of guiding and supervising further SOE reforms.”6 In all, there are approximately 300 SASACs in China. In addition to the central government SASAC, there are about 30 provincial SASACs overseeing provincially controlled SOEs, and scores of municipal SASACs supervising local SOEs.7 The position of SASACs within the government‐SOE hierarchy is shown in Figure III‐1. Figure III‐1: Structure of relationships among SOEs, SASACs and central and local governments Source: Deng, Morck and Wu. How big is the state sector in China? How big is the private sector? Ironically, given the pronouncements on the vibrancy of China’s private sector, the truth is that nobody knows for sure. For a number of years, this was a relatively easy question to answer because China was a centrally planned economy dominated by SOEs. But after three decades of privatizations, restructuring, joint ventures, and mergers and acquisitions involving SOEs, the answers to these questions remain elusive, despite the fact that China actually has quite detailed data on the subject. This section responds to Question 1 in the Commission’s original RFP. Using official data on SOEs and other entities directly controlled by SOEs, this section demonstrates that the state 6 (Deng, et al. 2011) 11. 7 (Deng, et al. 2011) 48. State Council of the National Peoples' Congress SASAC
Ministries GovernmentsLocal
Figure III‐13: Private sector value added and gross output, 1998‐2007/09 Source: National Bureau of Statistics of China. The table below compares private sector data with data for state‐owned and controlled enterprises. This representation of the state sector does not include all entities for which the state has a major share (directly or indirectly), but it does incorporate many more enterprises than data for SOEs alone. The table shows that the output, value added, and tax payments of SOEs and SHEs expanded substantially, though not as rapidly as the private sector did. The exception is employment, which reflects not only the growth of the private sector, but also the restructuring of bloated SOEs since the late 1990s. However, the employment data cover only SOEs, not SHEs, and thus understate employment attributable to the state sector. Table III‐5: Comparison of the private sector and the observable state sector 1998‐2001 2002‐2004 2005‐2009 1/
Private SCE Private SCE Private SCE
Table IV‐4: Number of industrial SOEs and SHEs and the number construction SOEs, by region
Source: National Bureau of Statistics of China.
Industrial Construction Total
firms that raise capital in the United States are required to submit form 20‐F annually. This form is analogous to the form 10‐K submitted to the SEC by domestic corporations. For this study, 20‐F forms were reviewed for the firms listed in Table VI‐1 below.
Table VI‐1: Central SOEs and ownership shares of selected companies raising capital in U.S. financial markets, 2010