Page 100 - Azerbaijan State University of Economics

Bryan Davis: State owned enterprises: Chinese fdi in Canada via the lenses of perceptual, political,
economic and social considerations

In the early 2000’s China launched a “going global” strategy with the aim to “promote the

international operations of capable Chinese firms with a view to improving resource allocation

and enhancing their international competitiveness.” Since the time of the launch of this strategy

Chinese SOEs have grown significantly to become some of the largest and most profitable

companies in the world. Figure 1 on the following page shows three of the largest Chines SOEs

of the 65 that are included within the largest 500 firms globally.

Figure 1: The prevalence of SOEs amongst the largest firms in the world

As a result of their size and economic power SOEs in China account for a significant portion

of the Chinese economy. In fact, such firms are so large that they account for more than half of

Chinese output and employment. Chinese SOEs are managed by the central government’s

investment arm, the State-owned Assets Supervision and Administration Commission of the State

Council (SASAC) which acts on “the principle of separating government administration from

enterprise management and separating ownership from management power.” SASAC invests,

supervises and manages the state-owned assets. This governance and administrative structure is a

source of contention with respect to potential Chinese FDI in Canada.

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