China’s State-owned Enterprises and Competitive Neutrality

HKUST IEMS Thought Leadership Briefs No. 54

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Alicia García-Herrero and Gary Ng

Whether or not China adopts the principles of competitive neutrality in its huge market is important for China and for the rest of the world. The advantageous position of SOEs in China results in a poor competitive business environment, with the automotive sector being furthest away from competitive neutrality General and sectoral trends point to private firms being unable to leverage as much as SOEs A working measure of competitive neutrality could help improve the level playing field for foreign companies in China. The concept could even be introduced in a potential reform of the World Trade Organisation.

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