Reform of Chinese State-Owned Enterprises What China Can Learn from the Practice of Competitive Neutrality Policy in Australia

Xue Bai

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In her thesis, Xue Bai realizes an in-depth study examining the challenges China faces in its endeavor to maintain a level playing field when state-owned enterprises (SOEs) actively compete in the market.

The study examines various rounds of SOE reform in China and highlights the nature of SOEs and their close linkages with their government owners and the Chinese Communist Party (CCP). This book observes that the market presence of Chinese SOEs has increased after several rounds of reform and argues that now is a good time for China to reconsider just how level the playing field is between SOEs and non-SOEs. It is important because, in the absence of a competitively neutral environment, SOEs can reduce allocative efficiency by relying on their government ownership-generated advantages to take business from more efficient firms in the market.

The comparative study in Australia shows that the presence of SOEs in the market does not necessarily cause competitive neutrality concerns if the anti-competitive conduct of SOEs is successfully scrutinised by the competition law and there are competitive neutrality rules in place to maintain a level playing field between SOEs and non-SOEs in the market. This book, therefore, investigates the effectiveness of China’s current competition law and policy framework in ensuring a fair playing field, especially with a substantial number of SOEs active in the competitive market.

The author demonstrates while the existing competition legislation in China (the Anti-Monopoly Law) has been applied to Chinese SOEs, competition enforcement faces additional challenges when dealing with SOEs. China currently does not have specific instruments in place to preserve a level playing field between SOEs and non-SOEs. While policy instructions, like the Fair Competition Review System (FCRS), can address regulatory concerns of SOEs to some extent, the author argues that more needs to be done to address the lack of a level playing field between SOEs and non-SOEs in China.

The book provides general policy recommendations on how to implement a competitive neutrality policy in China that takes into account its unique economic and political structure. This book is an essential reading for scholars and practitioners of competition law and policy in China, as well as those interested in these issues internationally. This comprehensive study offers valuable insights into how China can promote fair competition between SOEs and private enterprises, thereby fostering long-term economic efficiency and social development.

Read the Introduction by Jacques Steenbergen, the Foreword by Deborah J. Healey, Browse the Table of Contents and Read the First Chapter here.

The book was awarded by the Concurrences Law PhD Award 2022.

Composition of the Law Jury 2022: