Governing China’s “national champions”: political control and corporate governance in China’s central state-owned enterprise sector Li Chen Faculty of Social Science and Centre for China Studies The Chinese University of Hong Kong Email:
[email protected] Abstract China’s economic reform during the recent decades has led to the rise of a group of giant business groups and financial institutions under the Chinese state’s control. Dominating strategic industries such as oil, power generation, telecommunication, aerospace, aviation, nuclear and banking, they occupy the “commanding heights” of the Chinese economy. However, the institutional evolution of China’s central state- owned enterprises and the role of the Chinese Communist Party (CCP) in shaping and governing these enterprises have been under-researched in the literature. This paper examines the mechanisms of political control in the corporate governance of China’s central state-owned enterprise sector. It identifies a distinctive governance model of “central state corporatism” and analyzes the party-state’s roles of organizational entrepreneurship and leadership talent management in governing China’s large central state-owned enterprises as China’s “national champions”. 1. Introduction China’s economic reform during the recent decades has led to the rise of a group of giant business groups and financial institutions under the Chinese state’s control. Dominating strategic industries such as oil, power generation, telecommunication, aerospace, aviation, nuclear and banking, they occupy the “commanding heights” of the Chinese economy. However, the institutional evolution of China’s central state- owned enterprises and the role of the Chinese Communist Party (CCP) in shaping and governing these enterprises have been under-researched in the literature.