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ABSTRACT
The massive overseas expansion of Chinese state-owned enterprises (SOEs) is a central aspect of China’s ‘rise’ to great-power status. There is significant disagreement, however, over how to interpret SOEs’ role. Are they instruments of Chinese statecraft, being directed purposefully from Beijing as part of a ‘grand strategy’? Or are they relatively autonomous, profit-maximising businesses, their free-wheeling behaviour often undermining Chinese foreign policy? Finding that there is evidence for both theses, we provide a framework to explain this. We propose theorising party-state/SOEs relations using the concepts of state transformation and regulatory statehood. We show that the Chinese state’s fragmentation, decentralisation and internationalisation since the late 1970s has substantially increased SOE autonomy and weakened but also transformed the executive’s control, reconfiguring it towards a regulatory mode of governance. Party-state/SOEs relations are thus characterised not by direct command and control but weak oversight and ongoing struggles within the party-state. We illustrate this using a case study of China Power Investment Corporation and its Myitsone hydropower dam project in Myanmar. Here, a central SOE clearly defied and subverted central regulations, profoundly damaging Sino-Myanmar state-to-state relations. Party-state authorities are now struggling to rein in this and other central SOEs.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes on contributors
Lee Jones is Reader in International Politics at Queen Mary, University of London. His research focuses on issues of security, governance and political economy, with an empirical focus on the Asia-Pacific. He is author of ASEAN, Sovereignty and Intervention in Southeast Asia (Palgrave Macmillan, 2012), Societies Under Siege: Exploring How International Economic Sanctions (Do Not) Work (Oxford University Press, 2015) and, with Shahar Hameiri, Governing Borderless Threats: Non-Traditional Security and the Politics of State Transformation (Cambridge University Press, 2015). He tweets as @DrLeeJones and his website is http://www.leejones.tk.
Yizheng Zou is Lecturer in the Centre for China’s Overseas Interests at Shenzhen University, China. His past research, published in Chinese-language journals, Critical Arts, and an edited volume on Islands and Britishness (Cambridge Scholars Publishing, 2012), focused on media, identity and British imperialism in China. His current research focuses on China’s ‘One Belt, One Road’ project, particularly the impact of major Chinese projects in Myanmar.
Notes
1 CPI merged with the State Nuclear Power Technology Company in July 2015, becoming the State Power Investment Corporation. For consistency, we refer continuously to CPI.
2 The following list draws on: Lieberthal (Citation2004: 178–9, 181–3); Pearson (Citation2005: 302–12); Tunsjø (Citation2013: ch.3); Lai and Kang (Citation2014: 302–3); and Breslin and Wang (Citation2016: 19–26).
3 For example, Shanghai Automotive Industry Corporation, owned by Shanghai’s provincial-level city government, is a multinational corporation, with a turnover of US$101.7bn in 2014. Hai’er, owned by Qingdao city, has the world’s largest market share in white goods.
4 This advances on existing literature, which implies but does not actually show that SOEs violate government regulations (e.g. Gill and Reilly Citation2007).
5 This underscores that much of the blame for the fiasco must obviously be attributed to Myanmar’s military elites, who sought many Chinese extractive and hydropower investments to help sustain and enrich themselves, ignoring both societal opposition and Myanmar’s own environmental laws.