Share of China’s top companies in the private sector continued to steadily decline in 2023

The share of China’s private sector among the country’s 100 largest listed companies, measured by aggregate market capitalization in the half-yearly PIIE tracker, continued to decline through 2023. It dropped from 38.1 percent in mid-2023 to 36.8 percent at the end of 2023, extending a nonstop slide since its mid-2021 peak of 55.4 percent. The private sector is defined restrictively as firms with less than 10 percent state ownership. Meanwhile, the share of the state sector, including both mixed-ownership enterprises (MOEs), in which the state owns between 10 and 50 percent, and majority-owned state-owned enterprises (SOEs), continued to advance in 2023, rising from less than 60 percent a year ago to more than 63 percent at the end of 2023.

This PIIE tracker, based on the methodology defined in our 2022 Working Paper, is an indication of market sentiment, not of real economic performance, and of relative shares not absolute levels of market value. The continuous retreat of the private sector among the largest listed companies aligns with a wealth of anecdotal evidence that the Chinese leadership’s 2023 rhetorical pivot in favor of private sector development, against prior emphasis on taming the “disorderly expansion of capital,” is not yet viewed by private sector participants as more than just lip service. The tracker suggests stock investors feel the same way.

The main driver of the slide in relative share is the continuous decrease in aggregate value of the private-sector listed companies among the top 100, which declined to less than US$2 trillion at end-2023 from its mid-2021 peak of US$4.7 trillion. By contrast, the aggregate market value of SOEs has been disconcertingly stable in recent years. Notably in the end-2023 ranking, Pinduoduo, the private-sector parent of online shopping platform Temu, gained prominence by becoming the fifth-largest listed Chinese company by market value for the first time. Despite their commercial success, private-sector battery giants BYD and CATL lost relative prominence in comparison with previous rankings. Private-sector internet giant Tencent keeps its longstanding top slot. The highest-valued SOE remains distiller Kweichow Moutai, followed by Industrial and Commercial Bank of China, as has been the case continuously since 2020.

Authors’ note: Earlier versions of the tracker in this series misidentified Yili Group and Jiangsu Yanghe Brewery as nonpublic enterprises in some years whereas the companies should have been coded as mixed-ownership enterprises. The impact on the chart is immaterial. This version of the chart and replication data file have been updated.

Data disclosure

The data underlying this analysis are available here [zip].