Political control for China's state-owned enterprises

Lessons from America's experience with hybrid organizations

Research output: Contribution to journalArticle

28 Citations (Scopus)

Abstract

China's reform of state-owned enterprises (SOEs) is intended to liberate the companies from bureaucratic control that hinders their management. Discussions of SOE reform, however, downplay the policy consequences. Can SOEs be "free" to succeed economically while some political control is maintained? Surprisingly, American experience with hybrid organizations - government-created companies that straddle the line between public and private - offers some precedent for managing the balance between political control and enterprise independence. Three strategies are derived for China. First, welfare functions must be stripped from SOEs and replaced by policy objectives compatible with commercial purposes. Second, reducing financial dependence on SOEs will remove a barrier to rational control. Third, and most importantly, a robust regulatory framework for control must be developed as a substitute for the weakened administrative linkages. The emerging control infrastructure rooted in state asset commissions is likely to prove ineffective for its blurring of ownership, administration, and regulation.

Original languageEnglish (US)
Pages (from-to)255-278
Number of pages24
JournalGovernance
Volume20
Issue number2
DOIs
StatePublished - Apr 2007
Externally publishedYes

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political control
China
experience
reform
Hybrid organizations
State-owned enterprises
assets
welfare
infrastructure
regulation
management

ASJC Scopus subject areas

  • Sociology and Political Science
  • Public Administration
  • Marketing

Cite this

Political control for China's state-owned enterprises : Lessons from America's experience with hybrid organizations. / Koppell, Jonathan.

In: Governance, Vol. 20, No. 2, 04.2007, p. 255-278.

Research output: Contribution to journalArticle

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