Opinion: China Might Be Able to Reform Its Way Out of SOE Restrictions in CPTPP Trade Pact

Zhang Chunlin is lead private sector development specialist at the World Bank Group’s Trade and Competitiveness Global Practice.

The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) trade agreement, while containing rather strict disciplinary requirements for state-owned enterprises (SOEs) in its Chapter 17, also limits their scope in several ways. In addition to the exceptions and exemptions, the definition of SOEs is an important part of the delimitation of the scope of application. If China continues stepping up its efforts to reform SOEs in fully competitive sectors, the number of enterprises that meet the CPTPP’s definition of SOEs could be reduced dramatically.