１【特集・論文】

Will China Continue to be a State Capitalism ?
Tomoo MARUKAWA［キーワード］State capitalism, state owned enterprise, China, anti‑dumping［JEL 分類番号］P31, P33

indeed occupies a fairly large position in the

1. Introduction

Chinese economy, and it has been favored in

Many Western and Japanese scholars havegovernmental policies. The existence of policy

recently characterized the Chinese economy

bias towards the state sector will be illustrated

as a state capitalism (Bremmer 2010; Harperby considering anti‑dumping protection mea-

2010; Kato, Watanabe, and Ohashi 2013; Ohashi

sures. After the global economic crisis in 2008,ed. 2013; Nakaya 2013). Within China, somethe policy bias was actually strengthened,

economists warned that the size of the state

resulting in the expansion of the state sector in

sector was expanding relative to that of the

China s GDP. However, at this point, the trend

private sector in the national economy ( guojin

has already been reversed, and it is likely that

mintui ), and this argument has triggered

the state sector s share in the economy willstrong debate among Chinese economists.

continue to decline. The gradual increase ofSome argue that central state‑owned enterpri-

private enterprises among the petitioners for

ses are strengthening their monopoly power inanti‑dumping protection also shows that there

key industries with the support of governmen-

is an irreversible trend in the reduction oftal policy and preferential financing from state‑policy bias towards the state sector.

owned banks. They argue that the expansion

The paper is structured as follows. The firstof the state monopoly will exacerbate thesection examines changes in the state sector s

distortion of the industrial structure, widen

share of China s GDP in recent years using

income disparity among the population, andsome hitherto ignored data. The second

encourage rent‑seeking activities (Deng 2010;section analyses the structure of petitioners

Wu 2010). Others refute that thisrelative

requiring anti‑dumping protection. Because

expansion of the state sector has not actuallyanti‑dumping measures have become a tool fortaken place (Hu 2012) or that the alleged

protection, the structure of their beneficiaries

phenomenon should not be regarded as awill indicate the types of enterprises thatproblem in a socialist economy (Wei andrequire and receive trade protection. This is

Zhang 2010).

followed by a brief conclusion.

This paper will show that the state sector

２

中国経済研究第１２巻第１号

In the following study, I use the data from

2. Changes in the State Sector s
Share of China s GDP

the State‑owned Assets Supervision and

The debate on whether or not there has

Ministry of Finance (MOF) to examine

been a relative expansion of the state sector

whether there has been a relative expansion ofis based primarily on industry (gongye )the state sector in China s GDP, including

statistics, which are the sum of manufacturing,

services. Let us first observe the changes inmining, and public utilities such as electricity

the total number of state‑owned enterprises

and heat supply, water supply, and gas supply.

(SOEs) in Table 1. The MOF data show thatAs has been pointed out by many authors

the number of SOEs decreased by 49,000 from

(Deng 2010; Hu 2012; Kato 2013), the share of

2002 to 2008, and beginning in 2009 it started tothe state sector─which includes state‑owned

increase. The SASAC data show a similar

enterprises and state‑controlled enterprises─

trend, though the actual number differs fromin China s total industrial revenue has shown a

the MOF data by roughly 1000 to 10,000. Bothconsistent decline since the 1990s. The state

the MOF data and SASAC data cover not only

sector s share was 52 percent in 1998 and

SOEs completely owned by the state but also

declined to 25 percent in 2013. The state

those which the state controls throughsector s relative expansion was observed only

shareholding, and neither include SOEs inin a limited number of subsectors includingbanking and insurance. The reason for the

petroleum and gas extraction, tobacco manu-

difference between the two data series isfacturing, and electricity and heat power

uncertain.

Administration Commission (SASAC) and the

supply (Deng 2010). The shortcoming of such

Both data series reveal that the number ofdiscussions based only on industrial statistics,

central SOEs─SOEs under the supervision of

however, is that they ignore the service

the SASAC─is consistently increasing, while

industry, where dominance of the state sector

the number of local SOEs─SOEs supervised

seems to be more pronounced than in the caseby local governments─decreased until 2009.

of other areas of industry. But because of theThis trend is the result of the Chinese

paucity of statistical data in this area, it is not

Communist Party s policy ofeasy to determine the state sector s share of

the large SOEs and letting go of the small

the service industry.

SOEs (zhuada fangxiao ), which means thattaking hold of

Table 1. Number of State Owned Enterprises
2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

SOEs

158,712

145,696

136,270

125,638

116,090111,937

109,664

110,799

113,712

135,682

Central SOEs

11,59813,357

13,52013,856

14,296

15,395

15,72918,181

18,69929,520

Other Central Ministries

5,909

5,708

5,844

6,115

6,255

6,167

6,189

6,614

7,620

11,737141,205

126,631

116,906

105,667

95,53990,37587,74686,00487,393

94,425

SOEs

n.a.

n.a.

137,753

127,067

119,254

115,087

113,731

115,115

124,455

144,715

Central SOEs

n.a.

n.a.

n.a.

16,29016,373

16,87017,63819,20423,73833,037

Other Central Ministries

n.a.

n.a.

n.a.

5,949

6,209

6,019

5,954

6,204

7,098

11,195

Local SOEs

n.a.

n.a.

n.a.

104,828

96,672

92,19890,13989,707

93,619100,483

MOF Data

Local SOEs
SASAC Data

Source: MOF (2006, 2012)

Will China Continue to be a State Capitalism ?

３

the large, central SOEs will expand while thethe amount of their assets relative to GDP

small, local SOEs will either merge with larger

show that the state sector has been expanding

SOEs or be privatized. The increase of local

since 2009. The question regarding whether or

SOEs since 2010, however, contradicts thisnot the SOEs share in GDP has increased

policy. It is perhaps the result of an increase

accordingly, however, remains unanswered.

local financial platforms (difang rongzi

Plenty of data are available for industrial

pingtai ), which are SOEs engaged in urban

SOEs, but very few are available for all SOEs

infrastructure construction established byincluding those for services. The figures that

local governments to obtain loans from state‑

the author managed to find out are the added

owned banks. The government s economic

value of all SOEs in 2006 and the added value

stimulus package after the global economicof central SOEs in 2006 and 2010 (SASAC

crisis in 2008 has triggered the proliferation of

2007:33; SASAC 2011:66). From these figures,

these platforms.

the share of all SOEs in China s GDP isin

The reversal from a decrease to an increase

calculated as 20.2 percent in 2006, and thehas also occurred in the total amount of SOE

central SOEs contributions were 10.7 percent

assets. As shown in Figure 1, the amount ofand 10.3 percent in 2006 and 2010, respectively.

SOE assets as a percentage of China s GDP

These calculations suggest a much smaller

declined until 2005 and remained almost at theshare of the state sector than the calculation

same level for a few years, and has sharply

conducted by Szamosszegi and Kyle (2011),

increased since 2009. The assets owned by

who estimate that the total SOE share incentral SOEs have steadily increased since

China s GDP was 39.9 percent in 2007. Their

2007. Both trends in the number of SOEs andhigh estimate is influenced by their calculation

Figure 1 Total Amount of SOE Assets (as % of GDP)

Source:MOF data and China Statistical Yearbook

４

中国経済研究第１２巻第１号

of the SOE share in services─estimated atvalue of SOEs in banking and insurance is53.3 percent─that is based on the official

estimated by multiplying the added value of

figures of the SOE share of urban fixedbanking and insurance by the state sector sinvestment and urban employment. However,share in fixed capital investment in thisI suspect that the private sector s businessindustry. Thus, the state sector s share of theactivities in transportation, wholesale, andGDP, including banking and insurance, isretailing are only partially represented byestimated as 22.8 percent in 2006.

official urban investment and urban employ-

Although the SASAC reports only the added

ment statistics. One reason for this is thatvalue in 2006 and 2010, the profits and tax andthese businesses often take place in ruralbusiness revenue of all SOEs and central SOEs

areas. There are other reasons for the wide

are reported by MOF and SASAC annually.

gap between the calculation based on SASAC

Since it is likely that profits and tax, businessfigures and that made by Szamosszegi andrevenue, and added value are highly correlated,

Kyle (2011). First, SASAC figures do not

I estimated the added value of all SOEs andinclude SOEs in banking and insurance.

central SOEs from 2001 to 2012 from these

Secondly, the added value of non‑corporate,

data. Figure 2 shows the estimate based onstate‑owned organizations such as central andprofits and tax. It is based on the assumption

local governments, schools, universities, andthat the ratio of added value to profits and tax

scientific institutions are not included in

was fixed during the period. Figure 3 shows

SASAC figures.

the estimate based on business revenue, which

Because the focus of this study is on

is based on the assumption that the ratio ofclarifying the distinctive features of theadded value to business revenue was fixed

Chinese economy, I did not include the non‑during the period. Although the two estimates

corporate, governmental and semi‑governmen-

do not exactly follow the same trend, they

the state sector, １ because

share some common features: first, the state

their activities are likely to be conducted by

sector s share in 2008 was higher than that in

the public sector, even in more market‑

2001; second, the state sector s share sharply

oriented economies. I will only add theincreased in 2010 and 2011 but declined inestimated added value of SOEs in banking and2012; and third, the central SOEs share in

insurance to the added value of2008 was higher than that in 2003.

tal entities into

all SOEs

estimated using the SASAC figures to reachThis estimate sheds new light on the debate

the state sector s share of the GDP. The added

regarding the relative expansion of the state───────────
１ According to my estimate, central and local
governments, non‑corporate state‑owned organizations in railroads, postal service, scientificresearch, technological services, education,
medical and social welfare services, culture andentertainment, and others accounted for 10.6
percent of the GDP in 2012. Adding this to theshare of the state sector, SOEs and otherstate‑owned organizations commanded 35.9
percent of the GDP in 2012.

sector. First, it shows that the state sector did
expand its share of the GDP after 2001. Since it
is apparent that the state sector s share has
declined in the industrial sector the results
suggest that this decline has been more thancompensated for by the increase of the state
sector s share in services. Secondly, the state
sector sharply expanded its share after 2009
when the Chinese government launched theWill China Continue to be a State Capitalism ?

５

Figure 2 Added Value of the State Sector and Central SOEs as % of GDP (Estimate 1)

Source: Calculated by the Author using MOF and SASAC data.

Figure 3 Added Value of the State Sector and Central SOEs as % of GDP (Estimate 2)

Source: Calculated by the Author using MOF and SASAC data.

economic stimulus package. It is noteworthy

the relative expansion of the state sector.

that the expansion took place at the time when

We can now see that these warnings weresome Chinese economists began warning ofjustified although the proponents failed to６

中国経済研究第１２巻第１号

provide enough evidence to support theirrealize, though its interpretation by SOEs has

discussion. Thirdly, the central SOEs role inranged from partial divestiture of assets tothe expansion of the state sector was not as

corporatization of the entire company.

prominent as suggested by some authors

3. Changes in the Petitioners for
Anti‑Dumping Protection(Deng 2010; Ohashi ed. 2013). Both estimatesshow that the state sector s share in the GDP,
excluding central SOEs, grew more rapidly

Anti‑dumping (AD) measures refer to thethan that of central SOEs from 2010 to 2011.

temporary imposition of tariffs on imports

The relative expansion of SOEs in the GDP,

from a certain exporting country or firm that

excluding central SOEs, coincides with thehas been judged to be engaging in unfair

expansion of their assets during the same

pricing. Since the establishment of the World

period (see Figure 1). Perhaps the proliferation

Trade Organization (WTO) in 1995, China hasof local financial platforms was the primaryalways been the number one target of AD

contributor to the expansion of SOEs during

investigations in the world (Li 2007). The

this period.

recent rise in the use of AD measures suggests

It is also worth mentioning that the period ofthat they are used as theback door tostate sector expansion was short. The shareprotection by countries that can no longer use

dropped in 2012, and it is likely that thisconventional measures for protection (Baruah

downward trend will continue. This is because

2007).

the momentum for SOE reform and private

China itself has initiated a large number ofsector development was renewed in November

AD investigations since 1997. Beginning with

2013 when the Central Committee of thean AD investigation on newsprint paper

Chinese Communist Party put forth theimported from the United States, Canada, andDecision on the Deepening of Reform. The

South Korea, China has reported to the WTO

decision suggests that some bold steps will bethat it initiated 215 AD investigations by thetaken in the direction of privatization of SOEs

end of June 2014. China is no longer only aand the entry of private enterprises into thetarget of AD measures but also one of theirsectors hitherto monopolized by SOEs. The

primary users. I suspect that some of the AD

previous Party decision regarding economic

investigations were made to counter otherreform made in 1999 stipulated that the state

countries AD measures on imports fromsector would assume

dominant positions in

China, because two of the top three economies

important industries and important realms.

that have initiated AD measures against

The new decision in 2013 states only that the

China, the European Union and the U.S., arestate sector will

invest in these industries

also among the primary targets of AD

and realms. The proposal for creating a

investigations made by China. However, it ismixed ownership economy is another new

also obvious that China s AD behavior is notpoint in the decision. During the subsequent

solely driven by a tit‑for‑tat strategy (Prusa

months, it turned out that the transformation

2001) because Japan, which was the secondof the corporate structure tomixed owner-largest target of China s AD investigations

ship has become a political imperative thatbetween 1995 and June 2014, with 37 cases, has

every SOE, including central SOEs, should

seldom initiated AD investigations against

Will China Continue to be a State Capitalism ?

China─only twice during the same period.

７

government leaders have been strengthened.

According to China s Regulation on Anti‑

Based on the above reasoning, I will report

Dumping and to similar laws and regulations in

the changes in the structure of firms that haveother countries as well, AD duties can bepetitioned for AD protection. From December

imposed when imports that are unfairly priced

1997 to June 2014, China s Ministry ofcause material injury to a domestic industry.

Commerce (MOFCOM) initiated AD investi-

The regulations have a detailed definition ofgations on 83 import items.2 Each time

what constitutes unfair pricing and the method

MOFCOM initiates an investigation, details─

of measuring the injury caused by dumping.

including the description of the import item,

Therefore, it seems that the decision to

the target of investigation, and the names ofprovide AD protection can be made strictly

the petitioners─are reported on its website.

according to economic criteria. However, someBy obtaining the names of enterprises fromstudies on AD cases in the U.S. suggest thatthe reports and searching for information onpolitical factors such as political connections

each business in a Chinese industrial enterprise

between the industries seeking protection anddatabase provided by Huamei Information, I

the politicians that can influence the decision

identified 192 firms and 4 industrial associa-

on AD measures may influence the decisions

tions that petitioned for AD protection on 71(Hansen 1990; Moore 1992). It is likely thatimport items from December 2001 through

China s decisions regarding AD are also

June 2014. I excluded 12 items for which the

influenced by political factors.

investigations started prior to December 2001,

However, in China s political context, theinfluence of political factors on AD may appear

because the names of their petitioners were
not listed in the MOFCOM reports.

in a manner different from a pluralistic

In the industrial enterprise database, thedemocracy like the U.S. In the latter, politicians

enterprises are classified by their controlling

may be motivated to support protection

shareholders. Using this information, I havemeasures that favor industries in theirclassified each enterprise into state‑controlled,constituency. In China, the government may

collective, private, foreign‑invested, and other.

introduce protection measures simply to pursue

Table 2 groups the petitions by their date ofits own industrial development strategy, or theapplication and the ownership type of theirgovernment may consider more petitions forapplicants. This shows that the share of state‑

protection from politically‑connected firms.

controlled firms that petitioned for AD protec-

Therefore, SOEs are likely to be favored intion was very high from 2001 through 2002 (79protection measures, because they are often

percent), which was much higher than theassigned important roles in government indust-

state sector s share in industrial revenue

rial policy and are likely to be well‑connectedduring the same period (45 percent). Thisto party and government leaders. If thissuggests the existence of a policy bias favoring

conjecture holds true, then an increase in non‑SOEs among the petitioners for AD protection
suggests that non‑SOEs have gained morefavor in China s industrial development policyor their political connections with party and───────────
２ The aforementioned number of AD cases
reported to the WTO (215) is the total numberof countries that are targeted in each AD
investigation on 83 particular items.

８

中国経済研究第１２巻第１号

Table 2. Firms that Petitioned for Anti‑dumping Protection
Period2001‑2002

2003‑20042005‑2006

2007‑20082009‑20102011‑20122013‑2014

State
No. of firms

Collective

PrivateForeign

Others

Total

22

1

2

2

1

28

Share

79%

4%

7%

7%

4%

100%

Weighted share

84%

2%

6%

6%

2%

100%

No. of firms

26

2

2

3

5

38

Share

68%

5%

5%

8%

13%

100%

Weighted share

81%

8%

3%

3%

5%

100%

No. of firms

18

1

6

1

1

27

Share

67%

4%

22%

4%

4%

100%

Weighted share

72%

1%

25%

1%

1%

100%

7

1

2

2

0

12

Share

58%

8%

17%

17%

0%

100%

Weighted share

64%

5%

21%

10%

0%

100%

18

4

12

2

0

36

Share

50%

11%

33%

6%

0%

100%

Weighted share

57%

17%

22%

4%

0%

100%

14

2

6

10

1

33

Share

42%

6%

18%

30%

3%

100%

Weighted share

36%

3%

24%

35%

2%

100%

7

1

8

1

0

17

Share

41%

6%

47%

6%

0%

100%

Weighted share

45%

2%

51%

2%

0%

100%

No. of firms

No. of firms

No. of firms

No. of firms

Source: Calculated by the author on the basis of MOFCOM website and China Enterprise Databasestate‑controlled firms. However, the share ofpetitioner. China s Regulation on Anti‑dumping

state‑controlled firms in the petitions dropped

stipulates that only the petitions that are

to 41 percent from 2013 through 2014, while

supported by producers commanding more

the share of private firms increased to 47

than 25 percent of domestic production andpercent. Although the share of state‑controlled

more than 50 percent of the sum of thefirms reflected in the petitions is still higher

production volume of supporters and opponents

than the state sector s share in industrial

can be accepted. Therefore, being a solerevenue (25 percent), the policy bias seems topetitioner for an AD measure indicates thathave weakened.

the firm has a large market share andIn Table 2, theweighted share of eachsignificant influence on the industry. Although

type of firm is also shown. Weight is given to

the weighted shares show that state‑controlledeach firm according to its importance in thefirms were slightly more important in AD

petition for AD. If a firm was the sole

petitions than suggested by the simple shares,

petitioner for an AD measure, a weight of one

the overall trend remains the same.

is given to the firm. If a firm was one among x

The changes in the structure of petitioners

petitioners for an AD measure, a weight of 1/x

for AD protection reveal the growing influenceis given. The weighted share is calculated byof the private sector in shaping China s trade

summing the total weight factors of eachpolicy and the erosion of the state sector sWill China Continue to be a State Capitalism ?

９monopoly on AD protection. It should also beon the economic expansion of the state sector

noted that, along with the increase of the non‑relative to the private sector ( guojin mintui ).

state sector enterprises among the petitioners,

Secondly, it shows that this trend was

the diversity of industrial sectors has increased.

reversed in 2012 and the retreat of the state

From 2001 to 2008, 51 percent of thesector is likely to continue considering thepetitioners belonged to thecurrent momentum for SOE reform andraw chemicalmaterials and chemical products industry,

privatesectordevelopment.

Thirdly,thefollowed by chemical fibers (15 percent) andchanges in the structure of petitioners for AD

processing of petroleum, coking, and proce-

protection suggest a gradual weakening of thessing of nuclear fuel (10 percent). Many

policy bias favoring the state sector. In short,petitioners were subsidiaries of the China

China is gradually moving away from

National Petroleum Corporation (CNPC) andcapitalism.

state

China Petrochemical Corporation (Sinopec).
From 2009 to 2014, the shares of theReferences

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become the second largest group among thepetitioners (21 percent).
We can conclude from the above analysis
that non‑SOEs in diverse sectors are petitioning for AD measures, even though it wasonce a privilege enjoyed only by SOEs in alimited number of industrial sectors. This
indicates a gradual weakening of the bias
favoring SOEs in trade policy.

4. Conclusion
The contributions of this paper to the debate
regarding China s state capitalism can besummarized as follows. First, it shows that thestate sector s share in China s GDP expanded
between 2010 and 2011, underpinning thediscussions made by some Chinese economists───────────
３ The shares of industrial sectors related topetrochemicals are still very high compared tothe share these sectors have in industrial
revenue. The high share of chemicals involvedin AD cases is a common feature in India(Baruah 2007).

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中国経済研究shuppan.
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Will China Continue to be a State Capitalism ?

１１

Will China Continue to be a State Capitalism ?
Tomoo MARUKAWA (Tokyo University)
Keywords: State capitalism, state owned enterprise, China, anti‑dumping
JEL Classification Numbers: P31, P33
This paper sheds new light on the debate on China s state capitalism. Using some hitherto
ignored data, it shows that the state sector indeed occupies a fairly large position in the Chinese
economy, and its share in GDP has gradually increased after 2001. The paper suggests theexistence of policy bias favoring the state sector by showing the high proportion of state owned
enterprises among the petitioners of anti‑dumping protection measures. After the global economiccrisis in 2008, the policy bias was even strengthened, resulting in the expansion of the state sector
in China s GDP during 2010‑2011. However, at this point, the trend has already been reversed, and
it is likely that the state sector s share in the economy will continue to decline. The gradualincrease of private enterprises among the petitioners for anti‑dumping protection also shows that
there is an irreversible trend in the reduction of policy bias towards the state sector.