ABSTRACT
This chapter provides a snapshot of China's state-owned enterprises (SOEs) reforms implemented since early 1980s. It focuses on the major challenges facing SOE reforms and highlights that though central leaders are clearly aware of the inefficiency embedded in the SOEs, it is likely that SOEs will continue their policy roles in the economy. Reform policies in the 1980s focused on decentralisation by offering SOEs more decision-making autonomy and incentives through profit sharing. By 2016, there were about 19,022 SOEs at central and local levels that engaged in a wide range of industries including energy, commodities, telecommunication, finance, hotel and retail business. The central government's firm control of SOEs is also attributable to the long standing principle of maintaining stable employment in SOEs though the state sector shared only about 14.9 percent of urban employment in 2016 as indicated previously. The Chinese government has initiated a series of reforms since the 1980s with an aim to enhance the efficiency of SOEs.
