- China’s SOEs account for 60 percent of the country’s GDP while contributing to a major part of the country’s urban employment and new job creation. Through these enterprises, the Chinese state maintains control over key sectors deemed strategic, such as natural resources, power generation, defense, and telecommunications.
- China’s SOEs saw a 1.3 percent increase in revenue in 2024 compared to the previous year, according to the latest official data. The Ministry of Finance reported that SOEs generated 84.72 trillion yuan in operating revenue, while their combined profits rose by 0.4 percent year-on-year to 4.35 trillion yuan.
- Although revenue growth remained positive in 2024, it was relatively modest compared to previous years. Meanwhile, the State-owned Assets Supervision and Administration Commission (SASAC) has set ambitious targets for the year ahead. State-owned enterprises are expected to promote emerging industries and accelerate the modernization of traditional sectors to boost economic growth in 2025.
- According to Yuan Ye, Vice-Chairman of the SASAC, the government will support central SOEs in making advancements in both core and emerging technologies while actively participating in major science and technology initiatives. He emphasized that these enterprises will be encouraged to prioritize goal-oriented fundamental research and strive to develop and master innovative technologies.
- Since 2019, the Chinese government has intensified efforts to improve the innovation capabilities of SOEs. This commitment was also evident in 2024, when central SOEs invested 2.7 trillion yuan in strategic emerging industries, an increase of 21.8 percent year-on-year. However, state-backed enterprises typically face weaker incentives to innovate, and it remains to be seen whether SASAC will meet its targets.
Sinolytics is a research-based business consultancy entirely focused on China. It advises European companies on their strategic orientation and specific business activities in the People’s Republic.