The Complexities of the State-Industrial Complex

About one year has passed since the third plenum of the 18th Central Committee of the Communist Party, and we are only beginning to get a clearer picture on renewed reforms for stated-owned enterprises (SOEs). Some of these companies have pushed ahead with changes, but their impact on the long-term growth prospect of the economy remains unclear.

Compared with reforms to the fiscal system and the financial markets, SOE reform stands out as unique because every SOE has a different set of circumstances. That is why the central government has drawn out basic guidelines and detailed rules are fleshed out on an ad hoc basis by the local governments and enterprises.