International Investment by State-controlled Enterprises: A Source for Concern?
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The international business activities of state-controlled enterprises appear to differ from those of otherwise comparable private-sector firms, giving rise to issues that provide a basis for corrective policy actions. The rapid growth in international investment by state-controlled enterprises (SCEs), particularly those of China, has raised considerable public disquiet and policy challenges in a number of host countries. Examination of the issues associated with Chinese SCEs reveals grounds for policy concern with regard to transparency and accountability, the pursuit of non-commercial goals, and the deployment of artificially created competitive advantages resulting from government subsidization, preferential treatment, and structural distortions. In light of these concerns, we discuss possible policy responses at the level of the home country, the host economy, and through international regulation.