ABSTRACT
The reform of China’s ‘strategic industrial sectors’ (e.g. the utility sector, the heavy industries and the military and defence industries), which are still dominated by largesized state-owned monopolies, has been on the agenda for further reform by the Chinese government since the end of 2003. The mainstream view within China (Zhang, 2005) is that the large-sized state-owned enterprises (SOEs) are less efficient than firms in the private sector and, as a result, will be less able to survive in the more open market provided by China’s WTO entry. Therefore, in order to cope with the forthcoming challenges from international competitors, further liberalization, they argue, particularly in the area of competition policy, needs to be introduced within the strategic sectors. However, the question remains: under what circumstances will competition policy contribute to further successful reform of the strategic sectors?
