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The private sector advances in China: The evolving ownership structures of the largest companies in the Xi Jinping era

Author

Listed:
  • Tianlei Huang

    (Peterson Institute for International Economics)

  • Nicolas Veron

    (Peterson Institute for International Economics)

Abstract

This paper documents recent structural changes in China’s corporate landscape, based on company-level data, providing a complementary perspective to that of official Chinese statistics. We classify China’s largest companies by revenue since 2004 (based on Fortune Global 500 rankings), and largest listed companies by market capitalization since 2010, into state and private-sector categories, using a conservative definition of the private sector. Among the largest companies by revenue, the private sector was nonexistent in the mid-2000s but has grown steadily in the past decade, even though the state sector still dominates. The aggregate revenue of private-sector companies has grown from zero in Fortune’s ranking in 2005 (based on 2004 revenue) to $104 billion in the 2011 ranking, or merely 3.8 percent of the $2.78 trillion in aggregate revenue for all Chinese companies in the ranking, and to $1.7 trillion in the latest 2021 ranking (based on 2020 revenue), or 19 percent of the Chinese companies’ aggregate revenue. As for market value of the largest listed firms, the private sector’s share in the top 100 listed Chinese companies was only 8 percent at end-2010 but crossed the 50 percent threshold in 2020 and retreated slightly in 2021 to 48 percent, following that year’s regulatory crackdown on several private-sector-dominated industries. These findings do not support a narrative of broad-based rollback in recent years of previous private-sector expansion.

Suggested Citation

  • Tianlei Huang & Nicolas Veron, 2022. "The private sector advances in China: The evolving ownership structures of the largest companies in the Xi Jinping era," Working Paper Series WP22-3, Peterson Institute for International Economics.
    • Handle: RePEc:iie:wpaper:wp22-3
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    Cited by:

    1. Sjöholm, Fredrik, 2023. "The Return of Borders in the World Economy: An EU-Perspective," Working Paper Series 1469, Research Institute of Industrial Economics.

    More about this item

    Keywords

    ownership structure; state-owned enterprise; private-sector enterprise; China;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects

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