China’s centrally-administered State-owned enterprises (SOEs) have significantly contributed to the nation’s technological advancements, investing over 1 trillion yuan (approximately $139 billion) annually in research and development (R&D) over the past two years, according to a recent report by the State-owned Assets Supervision and Administration Commission (SASAC).
The report, which highlights the progress of SOEs in 2024, indicates that these enterprises have played a pivotal role in the transformation of traditional industries while simultaneously fostering the growth of strategic emerging industries. The surge in R&D investment is driving technological breakthroughs, with major achievements emerging across various sectors.
Strategic Shift Toward Global Integration and Innovation
SOEs are expected to continue deepening integration across industries, expanding their global market presence, and actively engaging in the creation of global value and innovation chains. Tan Zuojun, deputy director of SASAC, emphasized that SOEs must focus on overcoming technological bottlenecks, developing cutting-edge innovations, and mastering key technologies to ensure long-term competitiveness.
The report also highlighted a significant increase in SOEs’ investments in strategic emerging industries—a growth sector that saw a 32.1% year-on-year rise in investment last year, with total annual revenues exceeding 10 trillion yuan. In the first three quarters of 2024, the value of investments in these industries grew by 17.6%, accounting for nearly 40% of total SOE investments.
Impact on Traditional and Emerging Industries
The transformation of traditional industries, accelerated by technology and innovation, and the rapid development of emerging sectors such as renewable energy, artificial intelligence (AI), and biotechnology, are central to China’s push for high-quality economic development.
Justin Lin Yifu, Dean of the Institute of New Structural Economics at Peking University, underscored the importance of leveraging China’s industrial advantages to foster ongoing innovation. He stressed that local conditions should guide the development of new quality productive forces, which are fundamental to the nation’s technological revolution.
Collaboration with Private Sector Drives Growth
While SOEs lead in strategic investments, they have also strengthened collaboration with the private sector, contributing to the growth of over 2 million enterprises in the supply chain, with 96% of these being private small- and medium-sized enterprises (SMEs).
According to Qiu Xiaoping, deputy chairman of the All-China Federation of Industry and Commerce, private enterprises have made substantial contributions to technological innovation, accounting for over 70% of technological advancements in China. Private companies also dominate the specialized “little giant” and high-tech sectors, which are integral to the development of new productive forces.
Financial Performance and Continued Expansion
In 2023, centrally-administered SOEs achieved a total revenue of 39.6 trillion yuan and profits of 2.6 trillion yuan, with total investments reaching 6.2 trillion yuan—a 6.9% increase from the previous year. These figures reflect the growing role of SOEs in China’s economic transformation, driven by innovation, strategic investment, and cross-sector collaboration.
The strong performance of SOEs, combined with the growing technological capabilities of the private sector, suggests that China is poised to continue its leadership in global technological innovation and high-quality economic development.