Document Type

Book Chapter

Publication Date




Most of the existing literature on Chinese SOEs asks how state ownership affects their governance. This chapter turns the question on its head: How do SOEs affect state governance in China? The chapter begins by distinguishing different modes of interaction between the Party-state and SOEs. Focusing on these modes of interaction, the chapter analyzes how SOEs have influenced China’s legal system. This chapter discusses the ideological and positional advantages enjoyed by SOEs in their legal treatment, and provide an analysis of SOEs’ impact on legislation, administrative rulemaking and in particular, the courts. It concludes by exploring a key implication of the analysis: whereas SOEs may have compensated for weak state capacity in an earlier phase of development, today they pose a major obstacle to the creation of a functional legal system that would enhance state governance capacity.


Comparative and Foreign Law | Law