The Role of China’s State-owned Enterprises in Preserving Social Stability

Abstract

As recent debates on China’s re-emphasis on the state sector mainly focused on economic profitability, this paper examines how much the state-owned enterprises (SOEs) contribute to social stability. Using a province-level panel regression, I find that the increase of SOE share of local employment is associated with the increase of protests as well as labor disputes from 2001 to 2011. This study interprets these empirical findings as evidence that SOEs may not be so effective in addressing social unrest in general, but not necessarily deteriorating social stability.