Xi’s Pitch to China Investors Hinges on Revitalizing SOEs

Per Bloomberg, Beijing is on a mission to revamp its state-owned enterprises, and show the world that investing in President Xi Jinping’s China can reward everyone from domestic savers to skeptical money managers.

Officials have kicked off a drive in recent months to boost the valuations of SOEs, a massive cohort that has contributed little to gains in the nation’s stock indexes over the years. These firms are in every corner of the economy — ranging from banking to ports and the steel industry — and the major entities account for almost half of the overall market capitalization, according to Goldman Sachs Group Inc.

The campaign, which has fueled a jump of over 50% in some SOE stocks, is accompanied by a slogan of buying into a “valuation system with Chinese characteristics.” While it’s unclear what exactly that means, the SOEs do sit at the heart of a crucial debate: the role of markets and investors in listed state companies in an era when Xi has extended his grip over the economy.