Party State's foot soldiers or willful market participants? The Chinese party state ownership steering of SOEs

There are to main views on the relationship between Chinese state-owned enterprises (SOEs) and the party-state. One perception is that the SOEs are foot soldiers, i.e. tools of the government. A different perspective is that SOEs are powerful and autonomous agents of their own. According to this view the SOEs behave in much of the same way as private enterprises. In this paper the foundation for each of these positions is outlined. Thereafter, a third perspective, which includes elements from the two main positions, is proposed. The conclusion is that the SOEs operate as profit-seeking actors in their day to day activities, but Beijing disposes control mechanisms that ensure that the enterprises carry out state policies. The main sources of control are to be found in the CCP. Under Xi Jinping the party-state is increasingly getting the upper hand in its relationship with the SOEs.