China’s State-owned Enterprises: Instruments of Its Foreign Strategy?

This article centers on the question of whether state-owned enterprises (SOEs) are instruments of China's foreign strategy. A simplistic answer of yes or no is far from sufficient, as the positive view suffers from ignorance of SOEs' agency, while the negative view is blind to the entrenched connections between SOEs and the government. It is obvious that SOEs have close connections with the Chinese government. However, whether these connections can be regarded as making SOEs a strategic instrument in China's foreign policies remains to be further studied. This article starts with the various SOE-government relationship models in the 'going out', i.e. globalizing, endeavours of SOEs in Southeast Asia and examines the fitness and priorities of the two parties' interests under each relationship model. The article concludes that under the government + SOE model, SOEs have long been the instruments of China's foreign strategy. Under the SOE + government model, SOEs can be regarded as weak instruments of foreign strategy, while under the independent SOE model, SOEs are likely to function as profit-driven economic players.