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47-494: The State Grid Corporation of China ( SGCC ), commonly known as the State Grid , is a Chinese state-owned electric utility corporation. It is the largest utility company in the world. As of March 2024, State Grid is the world's third largest company overall by revenue , behind Walmart and Amazon . In 2023 it was reported as having 1.3 million employees, 1.1 billion customers and revenue equivalent to US$ 546 billion. It

94-642: A 25% stake in REN since the second stage of its privatization (in 2012–2014). In Australia, State Grid owns a 41% stake in ElectraNet , a 19.9% stake in AusNet Services , and 60% stake in Jemena . In Brazil, State Grid is involved in developing, building, and operating hydropower facilities. State Grid acquired the control of CPFL Energia S.A. for the equivalent of US$ 3.4 billion in 2017. State Grid built

141-635: A bigger global market share by reducing price competition among SOEs abroad and increasing vertical integration. Overall, China's focus on SOEs during the Xi era have demonstrated a commitment to using SOEs to serve non-market objectives and increasing CCP control of SOEs while taking some limited steps towards market liberalization, such as increasing mixed (state and private) ownership of SOEs. Along with increased mergers, promotion of mixed ownership, and management of state capital have continued; results have been mixed. Transitioning solely state-owned enterprises to

188-487: A long period of time, without the major innovations and key core technologies achieved by state-owned enterprises, and without state-owned enterprises' long-term commitment to a large number of social responsibilities, there would be no economic independence and national security for China, no continuous improvement in people's lives, and no socialist China standing tall in the East of the world. Xi Jinping Thought also emphasizes

235-615: A majority of its outstanding capital stock or of its outstanding voting capital stock. Under the GOCC Governance Act (Republic Act No. 10149), GOCCs are overseen by the Governance Commission for Government-Owned or Controlled Corporations (GCG). The Governance Commission is the "government's central advisory and oversight body over the public corporate sector" according to the Official Gazette of

282-528: A mixed ownership was announced in 2013 at the 18th Central Committee of the Chinese Communist Party and re-affirmed by the 19th Party Congress . Following an August 2015 directive, SOEs' articles of association are required to specify the leading role of party organizations in their firms. The 2015 directive also increases the importance of party organizations within SOEs by requiring that

329-616: A political governance system in China’s SOEs—a Party-dominated governance system characterized by Party leadership, state ownership, Party cadre management, Party participation in corporate decision-making, and intra-Party supervision. CCP branches within China's SOEs are the governing bodies which make important decisions and inculcate its ideology . When China's SOEs were first created, they served as instruments for carrying out national goals and providing social stability via

376-718: Is overseen by the State-owned Assets Supervision and Administration Commission of the State Council . After the electricity Plant-Grid Separation reform in early 2002, the assets of State Electric Power Corporation ( 国家电力公司 ) were divided into five power generation groups that retained the power plants and five regional subsidiaries belonging to the State Grid Corporation of China in Beijing . China began an initiative to reform

423-538: Is the world's largest energy utility company. It operates almost all of China's energy transmission network. On December 12, 2007, two consortia bid for a 25-year license to run the Philippines power grid—privatization of the management of the Philippine government-owned National Transmission Corporation (TransCo), the consortium of Monte Oro Grid Resources Corp., led by businessman Enrique Razon, comprising

470-481: The CCP committee secretary and the chair of the board must be the same person. According to Xi, "[T]he dominant role of state ownership cannot be changed, and the leading role of the state-economy cannot be changed." In Xi Jinping Thought , the historical importance of state-owned enterprises is highlighted: [W]ithout the important material foundation that state-owned enterprises have laid for China's development over

517-606: The People's Liberation Army . They are expected "to work together with grassroots organizations to collect intelligence and information, dissolve and/or eliminate security concerns at the budding stage," according to the People's Liberation Army Daily . In 2024, the Chinese government announced SOE management would be assessed based on stock market performance. As of 2022 , SASAC oversees 97 centrally owned companies. These are

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564-451: The Philippine government to the private sector after 72 years and 2 months since the establishment of another government-owned corporation serving as TransCo's predecessor in power grid operations, management, and ownership National Power Corporation (NAPOCOR/NPC) that operated, maintained, and owned the grid from November 3, 1936 to March 1, 2003. The franchise and concession period will end on December 1, 2058. In Portugal, State Grid has

611-562: The Philippines , a government-owned and controlled corporation ( GOCC ), sometimes with an "and/or", is a state-owned enterprise that conducts both commercial and non-commercial activity. Examples of the latter would be the Government Service Insurance System (GSIS), a social security system for government employees. There are 219 GOCCs as of 2022. GOCCs both receive subsidies and pay dividends to

658-407: The iron rice bowl . Financial performance of SOEs was not a major concern until China's reform era. With the exception of a small number of national monopolies, SOEs compete in the market as privately enterprises do. State ownership does not prevent SOEs from seeking to make profits; rather they are incentivized to make profits to increase the value of the state's assets. SOEs have monopolies in

705-704: The workforce . Ninety-one (91) of these SOEs belong to the 2020 Fortune Global 500 companies. Almost 867,000 enterprises have a degree of state ownership, according to Franklin Allen of Imperial College London . The role of the Chinese Communist Party (CCP) in SOEs has varied at different periods but has increased during the Xi Jinping administration , with the CCP formally taking a commanding role in all SOEs as of 2020. For example, Lai Xiaomin ,

752-556: The 2000 km Ultra High Voltage power line delivering hydropower to the megacities Rio de Janeiro and São Paulo. In Chile, State Grid acquired Chilquinta Energía, the third-largest distributor of electricity in Chile , and Tecnored SA, which provides construction services to Chilquinta, from U.S. power company Sempra Energy . The deal was closed on June 24, 2020. On 13 November 2020, it was announced that State Grid had reached an agreement to acquire Compañia General de Electricidad (CGE),

799-493: The Chinese government increasingly funded SOE consolidation, supplying massive subsidies and favoring SOEs from a regulatory standpoint. These efforts helped SOEs to crowd out foreign and domestic private sector competitors. As part of China Western Development program, China's five large state-owned hydropower companies planned, underwrote, and built the majority of dams on the river and its tributaries. Beginning in 2007, central government SOEs were required to provide to

846-472: The Chinese interior where they would be more protected in event of foreign invasion. Beginning the late 1970s, SOEs became allowed to pay bonuses to workers. In 1984, the State Council issued a directive to expand the autonomy of SOEs. SOEs were also allowed to sell surplus goods on the market once they had met their quotas. Through the reform of "substituting taxes with profits" ( li gai shui )

893-547: The GOCCs when revenues are insufficient while program funds are given to profitable GOCCs to pay for a specific program or project. Subsidies from the National Government in 2011 amounted to 21 billion Philippine pesos . In the 2013 fiscal year, the national government gave P71.9 billion pesos to GOCCs in subsidies, nearly twice the 44.7 billion pesos that was programmed in the budget. In 2014, 77.04 billion pesos

940-475: The Philippine government. The Governance Commission among other duties prepares for the president of the Philippines a shortlist of candidates for appointment by the president to GOCC boards. Many but not all GOCCs have their own charter or law outlining its responsibilities and governance. GOCCs receive from the government "subsidies" and "program funds". Subsidies cover the day-to-day operations of

987-411: The Philippines (DBP) (P3.16-billion) and Land Bank of the Philippines (LBP) (P6.24-billion). Under Republic Act No. 7656, all GOCCs are required to "declare and remit at least 50% of their annual net earnings as cash, stock or property dividends to the National Government." The Commission on Audit reports that in 2013 of the 219 profitable GOCCs, only 45 remitted a full 50% share of their dividends to

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1034-594: The State Grid Corporation of China, and Calaca High Power Corp., won an auction conducted by the Power Sector Assets and Liabilities Management (PSALM) Corp. as it submitted the highest offer of $ 3.95 billion, for the right to operate TransCo for 25 years, outbidding San Miguel Energy, a unit of the Filipino San Miguel Corporation (bid of $ 3.905 billion), Dutch firm TPG Aurora BV, and Malaysia's TNB Prai Sdn Bhd. This initiated

1081-756: The Yangtze River delta, and three longitudinal alternating current lines that bring power to Southern China from the Northern region. The State Grid Corporation was involved in a multi-phase smart-grid project for China's electrical grid planned for 2011–2015. China's smart grid efforts are different from those in the United States in that its plans heavily use ultra high voltage (UHV) lines. Several UHV construction projects began in 2012 to bring UHV power lines across Huainan , Wannan, and Shanghai and another from Xilingol League to Nanjing . By 2015,

1128-530: The central SOEs which cover industries deemed most significant to the national economy. Companies directly supervised by SASAC have been reduced and consolidated through mergers according to the state-owned enterprise restructuring plan with the number of SASAC companies down from over 150 in 2008. Governments below the national level operate portfolios of SOEs which operate both domestically and abroad. Examples of regional or local SOEs include: As of 2019 Government-owned and controlled corporation In

1175-594: The central government a portion of their capital income, stock dividends, property transfer income, enterprise liquidated income, and other state-owned capital income. SOEs were major beneficiaries of China's stimulus program following the Great Recession , which began a period where the private sector withdrew and the state-owned sector expanded. The pace of SOE mergers has increased under Xi. The goals of China's current SOE mergers include an effort to create larger and more competitive national champions with

1222-568: The commission. In 2017, his assets (worth 53 million yuan) were seized, and he was sentenced to life in prison . In 2015, SGCC proposed the Global Energy Interconnection , a long-term proposal to develop globally integrated smart grids and ultra high voltage transmission networks to connect over 80 countries. The idea is supported by President Xi Jinping and China in attempting to develop support in various internal forums, including UN bodies. As of at least 2024, SGCC

1269-408: The company planned to have three more horizontal UHV lines through West Inner Mongolia to Weifang , from Central Shanxi – Xuzhou to Yaan –southern Anhui and 11 other lines by 2015. On October 29, 2014, The Central Commission for Discipline Inspection declared that the general manager of State Grid Shanghai Municipal Electric Power, Feng Jun, was detained in an anti-graft operation overseen by

1316-477: The country's power grid in December 2008. On January 15, 2009, TransCo turned over the operations, maintenance, management, construction, expansion, and eminent domain of the Philippine power grid and its related assets and facilities to NGCP which marked the start of the 25-year concession period and franchise and renewable for another 25 years with a total of 50 years, which privatized and turned them over from

1363-520: The country's power sector in a three-stage process in 1986. In the third and final stage in March 2002 the State Council of the People's Republic of China put into effect a plan to restructure the country's electric power system in order to create competition and separate generation and transmission functions. The State Grid Corporation of China was founded on December 29, 2002, when the restructuring divided

1410-563: The early 2000s, electrical shortages caused the government to institute rolling blackouts. The State Grid Corporation estimated there were 1 trillion yuan in losses from 2002 to 2005. The State Grid Corporation of China ran the first 1,000-kilovolt alternating current power line between Northern Shanxi and center Hubei in January 2009. In 2012 it began operation of an 800-kilovolt direct current line that sends hydropower from western Sichuan to Shanghai. It also has an alternating current loop line in

1457-536: The forefront of global seaport construction, and most new ports built by them are part of the Belt and Road Initiative . State-owned banks are important sources of funding for port construction. SOEs that compete in the market are largely owned by provincial or sub-provincial governments. A significant cluster of these SOEs are joint ventures with foreign companies in the automotive industry . In addition to their own operations, SOEs invest in private enterprises. From

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1504-473: The former State Power Corporation of China into two grid companies, five generation groups and four accessorial business companies. The two grid companies created were the State Grid Corporation of China and a smaller China Southern Power Grid Company . SGCC accounts for 80% of the Chinese grid, with China Southern Power Grid accounting for the other 20%. At its creation, SGCC company had a generation capacity of 6.47 gigawatts. In 2003 and progressively so through

1551-475: The former president of state-owned China Huarong Asset Management announced in 2015 that during the operation of China Huarong Asset Management, the embedded CCP committee will play a central role, and party members will play an exemplary role. As Jin et al. wrote in 2022, The overarching principle of SOE reform is to firmly implement the Party’s leadership and the modern enterprise system. This principle creates

1598-501: The government sought to give SOEs incentives to pursue profits, sought to reduce SOE dependence on the government, and sought to increase market competition. With the goal of boosting innovation and efficiency, more than half of China's largest SOEs had established technical development centers by 1993. The same year, the CCP issued its "Decision on Issues Related to the Establishment of a Socialist Market Economy System." In

1645-433: The government to use assets as collateral to issue debt or to sell shares to balance budgets. According to academic Wendy Leutert, China's SOEs, "...contribute to central and local governments revenues through dividends and taxes, support urban employment, keep key input prices low, channel capital towards targeted industries and technologies, support sub-national redistribution to poorer interior and western provinces, and aid

1692-555: The industries of telecommunications , military equipment, railroads , tobacco, petroleum , and electric power . SOEs have a primary role in China's energy sector . Its five large state-owned power generation companies are: Datang , Guodian , Huadian , Huaneng , and China Power Investment Corporation . Its state-owned grid companies are State Grid Corporation of China (SGCC) and China Southern Power Grid Corporation . Most Chinese universities are SOEs. China's SOEs are at

1739-501: The largest distribution of electricity in this country. In Italy, State Grid owns 35% stake in CDP Reti , which owns a third of Italy's power and gas grid operators Terna and Snam. State-owned enterprises of China A state-owned enterprise of China ( Chinese : 国有企业) is a legal entity that undertakes commercial activities on behalf of an owner government . As of 2017 , China has more SOEs than any other country, and

1786-457: The most SOEs among large national companies. As of the end of 2019, China's SOEs represented 4.5% of the global economy and the total assets of all China's SOEs, including those operating in the financial sector, reached US$ 78.08   trillion. State-owned enterprises accounted for over 60% of China's market capitalization in 2019 and estimates suggest that they generated about 23-28% of China's GDP in 2017 and employ between 5% and 16% of

1833-408: The national government. A government-owned or controlled corporation is a stock or a non-stock corporation, whether performing governmental or proprietary functions, which is directly chartered by a special law or if organized under the general corporation law is owned or controlled by the government directly, or indirectly through a parent corporation or subsidiary corporation, to the extent of at least

1880-403: The national treasury, leaving 174 others with unremitted government shares, amounting to more than P50 billion. Dividends remitted were only one-tenth (1/10) of the total required by law according to the commission. In 2014, on "GOCC Dividend Day", the Philippine government received 32.31 billion Philippine pesos worth of dividends and other remittances from 50 GOCCs. Seven GOCCs submitted over

1927-494: The perspective of these private enterprises, this form of partial state ownership is helpful in obtaining financing from banks, particularly as prompts banks to require less collateral. Sometimes in investing in private enterprises, SOEs acquire enough shares to nationalize them. Over the period 2018–2020, 109 publicly traded enterprises with more than $ 100 billion in collective total assets were nationalized in this way. SOEs help stabilize public finance, including through allowing

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1974-770: The privatization process for the transmission sector. The resulting consortium became the National Grid Corporation of the Philippines (NGCP). On February 28, 2008, TransCo's concession agreement with NGCP was executed and became effective. The agreement between NGCP and TransCo was signed by TransCo president Arthur Aguilar, PSALM president Jose Ibazeta, and NGCP directors Walter Brown, Elmer Pedregosa and Du Zhigang. In November of that same year, Congress approved bicameral resolution granting franchise to NGCP to manage and operate its transmission facilities nationwide. President Gloria Macapagal Arroyo signed Republic Act 9511 which granted NGCP to operate and manage

2021-520: The role of SOEs as part of the dominant position of state ownership necessary for common prosperity . In 2019, a CCP rule required SOE articles of association to require that major decisions must be discussed by the SOE's party committee before they are considered by management or by the board of directors. In 2023, multiple state-owned enterprises, including Shanghai Municipal Investment Group , established internal People's Armed Forces Departments run by

2068-560: The state's response to natural disasters, financial crises and social instability." Following the CCP victory in the Chinese Civil War , one of the party's early steps was to nationalize enterprises that the defeated Nationalists had controlled. During the Third Front campaign to develop heavy industry in China's interior regions, almost 400 state-owned enterprises were re-located from coastal cities to secret sites in

2115-432: The wave of reform thereafter, one goal was to separate SOE management from government and to empower a select group of SOEs with special property rights and autonomy. Consistent with CCP general secretary Jiang Zemin and Premier Zhu Rongji 's strategy of grasping the large, letting go of the small , major SOE reform occurred in 1997, which represented a change from the previously incremental reform efforts. The state

2162-501: Was encouraged to preserve large SOEs and to allow weaker ones to be "let go" through closing or consolidating. Other major policies that were part of the 1997 reforms included management and employee buyouts and the inclusion of foreign strategic partners. The general trend since 2000 has been for SOEs to increase in importance consistent with a broader resurgence of state activity in the market. SOE mergers have been routine since 2000. Beginning in 2003 with Hu Jintao 's administration,

2209-767: Was spent on GOCCs by the national government, 3% of which was classified as subsidies and 97% was classified as program funds. In 2013, on "GOCC Dividend Day", the Philippine government received 28-billion Philippine pesos in dividends and other forms of remittances from the 2012 operations of 38 GOCCs. Eight GOCCs remitted 1 billion pesos each: Philippine Reclamation Authority (PRA)(P1 billion pesos), Philippine Ports Authority (PPA)(1.03-billion), Manila International Airport Authority (MIAA)(P1.54-billion), Philippine Amusement and Gaming Corporation (PAGCOR) (P7.18-billion), Power Sector Assets and Liabilities Management Corporation (PSALM)(P2-billion), Bases Conversion Development Authority (BCDA)(P2.30-billion), Development Bank of

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