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Backbone for further development

By Hu Angang | China Daily | Updated: 2013-07-12 07:25

State-owned enterprises are not only modern enterprises, but also socialist enterprises, which is the biggest difference from capitalist enterprises. China's State-owned enterprises fully embody the national advantage, political advantage and organizational advantage of socialism. As socialist enterprises they have four distinct advantages - State-owned capital, State support, the organizational advantages of the Party, and wholeheartedly relying on the workers.

The first two advantages are external strengths, while the latter two are internal strengths.

Chinese State-owned enterprises enjoy a corporate culture which is largely based on traditional culture. Although these enterprises have learned from their multinational counterparts, their corporate culture is still largely different from the Western one.

The Western corporate culture emphasizes individualism, while the State-owned enterprise culture focuses more on harmony and collectivism. A good business model not only creates material wealth, but also creates spiritual wealth. Chinese corporate culture reflects this spiritual wealth, which in turn is a form of internal and external soft power.

China, being a huge economy, needs large, internationally competitive State-owned enterprises. This is the only way that China can ensure that its enterprises enjoy a strong position amid fierce international competition.

So improving the competitiveness of State-owned enterprises, and promoting and deepening reform of State-owned enterprises are necessary for China's economic development and social transformation and an important driving force for promoting sustainable and stable development of the economy and society.

The prosperity of an enterprise leads to the prosperity of a country; hence the strengthening of enterprises leads to the strengthening of a country. From the point of view of China, the essence of this is the rise of State-owned enterprises. From the point of view of the world, the rise of China's enterprises has great significance for the developing countries at least.

The author is the dean of the Institute of Contemporary China Studies, Tsinghua University.

(China Daily 07/12/2013 page8)

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