Revenue vs Market Cap large Chinese coporations are not listed on stocks or only a bit of their shares thus revenue / market cap is very different measures Role of State-Owned Enterprises almost 40 years after market reforms, China’s state-owned enterprises still have a large role state owned enterprises are called on to support economic growth for China/deliver aid/satisfy industrial policies Problems with SOEs lots of debt pushed down future productive growth and pushes up public debt current policies not tackling SOE performance Private firms is contributing to about half of economic exports Lack of Multi-Nationals China lack multi-national corporations: mostly domestic, so making home continent growth. State Sector Features large SOE are integral to national power—kind of branches of government executives are appointed by CCP Organization Department party officials in national hierarchy will rotate in / out of government posts China’s largest companies are remarkably less profitable (high taxes, etc.). What about the low financial returns? Two views— As companies: SOEs are flawed, wasteful of state resources As branches of government: self-funding government companies that persue national policy China’s large corporations grow fast 2008: China had 26 firms in fortune top 500 2023: China had 133, 70% are SOES Hence these companies can grow very fast. Why this rapid rise in foretune 500 post-288 credit-driven infrastructure drive to make growth better massive foreign policy reserves state-directed mergers of SOEs to maket hem bigger As a result, China’s largest firms is related to infrastructure and manufacturing. state financing in foreign investment state finances a lot of foreign investment Global 500 China’s tech sector, consumer sector, and health sector is much lower; its very much construction based. This is very different than Japan. Some Mergers Baushan Steel was 4th largest steel company; Wuhan iron and steel 10th largers, but financilaly troubled. Thus, government merged Baoshan steel and Wuhan steel to make Baowu steel. This company kept merging steel companies.