China is known for being the country with the highest number of state-owned enterprises (SOE), but are all Chinese companies state-owned?

In this article, we will bring you an overview of the importance of state-owned companies to the Chinese economy, and what industries are highly influenced by the Chinese government.

Are all Chinese companies state-owned?

No, although China is the country with the highest number of state-owned enterprises, roughly 150,000, these represent a small percentage of the total number of companies in China. According to Statista, as of 2018, there were 34.7 million companies registered in China. 

What percentage of Chinese companies are state-owned?

There are roughly 34.7 million companies in China, and 150,000 of them are state-owned. That means that state-owned enterprises represent 0.43% of all of the companies registered in China. 

Despite representing a small percentage of all the companies in the country, state-owned enterprises have a crucial role in the Chinese economy and are vital contributors to GDP. It is estimated that Chinese SOEs contribute 40% to China’s GDP.

Why does China have so many state-owned enterprises?

China has a political system that heavily relies on controlling certain key industries in its economy. Having SOEs in these industries allows the country to easily control, and enforce legislation that would otherwise be difficult to implement if these companies were privately-owned. 

China’s socialist model also promotes equality among its citizens, and having SOEs allows the country to have legislation that is equal for every citizen wherever they live.

Since some of these SOEs operate on a regional level, it also allows Beijing to control its local governments. 

What Chinese industries are state-owned?

China has defined certain industries depending on their importance to the country. There are three main categorizations, depending on how vital industry is to the economic stability of the country. The industries that are currently the government’s priority are:

  • Aviation
  • Defense
  • Energy (Oil, Gas, Coal)
  • Telecommunications
  • Rail

Companies in these industries tend to be state-owned even though they might trade on public markets. This has prompted the US to delist some of these companies that are partly state-owned.

There are other industries that also hold significant importance:

  • Banking
  • Insurance
  • Shipping
  • Technology
  • Automotive
  • Commodity producers
  • Electronics
  • Construction

Some companies in these sectors are also state-owned and continue to hold significant importance for Beijing. Even other industries that are not so crucial for the Chinese government, are still partially owned by Beijing.

chinese soe

Biggest Chinese state-owned companies

Some of the largest Chinese companies are state-owned enterprises here are the 15 largest Chinese SOEs:

  • State Grid Corporation of China
  • China National Petroleum Corporation
  • China Petrochemical Corporation
  • Industrial and Commercial Bank of China
  • China State Construction Engineering
  • China Construction Bank
  • Agricultural Bank of China
  • China Life Insurance Company
  • China Railway Engineering Corporation
  • Bank of China
  • China Railway Construction Corporation
  • China Mobile
  • SAIC Motor
  • China Communications Construction Company
  • China Minmetals

Does China own all businesses?

No, although Chinese SOEs are a crucial part of the Chinese economy, they represent just 0.43% of all the companies registered in China. 

Is Alibaba state-owned?

No, Alibaba is a public company. However, the Chinese government has a considerable influence on Alibaba. Since the government has oversight of all of the regulations and legislation that could impact Alibaba either in a positive or negative way.