<p>You have to distinguish between state owned public service companies and state owned for-profit companies, the for-profit companies are really commercial companies with governments being major shareholders. I would not use the term "state owned" in case of the latter form. Governments can form joint-ventures with private and multinational companies. Governments in this instance would have a special investment management agency or just a fund that are formed to attract investments from abroad. And, in every new joint venture, the government is the main shareholder. So, in CNPC's case, government is a proper shareholder just like institutional shareholders. Since Chinese government is the main shareholder it has the majority of voting rights and would certainly want a good return on investment and they are "aggressive in making profit" as you suggest.</p>

<p>In the former case where the companies, if it can be called a company, are formed to provide public services (think of nationalised train companies), they are not there to make profit, but provide low cost high quality services. </p>

CC BY-SA 3.0
2016-01-08T17:30:25.433Z
2016-01-08T17:30:25.433Z
london
<p>Take China National Petroleum Corporation(CNPC) as an example, almost 86% of its stock is stated-owned. Its senior managers' promotion are related to the company's profit. And since there are investors who own 14% percent of its stock, maybe the company will face revenue pressure from them. But I think this is not sufficient to explain why they are so <strong>aggressive</strong>, I must overlook  something more important. Any ideas are going to be  appreciated.</p>

CC BY-SA 3.0
2016-01-08T04:30:15.907Z
What exactly do you mean by "aggressive"?
rocinante
CC BY-SA 3.0
2016-01-08T04:35:01.913Z
@rocinante They take every means to make profit. Such as lobbying, 
bribing, etc.
Rowan
CC BY-SA 3.0
2016-01-08T04:36:58.140Z
With your specific example of CNPC, who exactly are they bribing and lobbying if they're the also government? Themselves?
rocinante
CC BY-SA 3.0
2016-01-08T04:39:27.050Z
What I'm getting at here is that I don't see on what premise you think that state-owned firms would behave any differently with respect to shareholder returns than private firms. They're "aggressive" because they need to make money for the state budget, which is tasked to provide social services more and more people. This is especially true for China where there is a huge population of older people.
rocinante
CC BY-SA 3.0
2016-01-08T04:39:59.630Z
@rocinante They are stated-owned company but their senior doesn't work in government department. Government and the company has their own interest demands.
Rowan
CC BY-SA 3.0
2016-01-08T04:42:07.267Z
The seniors don't need to work in government departments. As (former) tax paying citizens, they have a right to social and healthcare services that the state has agreed to provide. Again, I don't understand on what premise you think that there would be no "profit" motive for state-owned firms.
rocinante
CC BY-SA 3.0
2016-01-08T04:45:58.813Z
@rocinante  Yes, I find my premise seems somewhat paradoxical. I'll clear my head and edit the question.
Rowan
<government><political-economy><profits>
Why does state-owned company so aggressive in making profit?
Rowan
# Why does state-owned company so aggressive in making profit?

(Asked by: username_0 on 2016-01-08)

Take China National Petroleum Corporation(CNPC) as an example, almost 86% of its stock is stated-owned. Its senior managers' promotion are related to the company's profit. And since there are investors who own 14% percent of its stock, maybe the company will face revenue pressure from them. But I think this is not sufficient to explain why they are so **aggressive**, I must overlook something more important. Any ideas are going to be appreciated.

**Tags:** government, political-economy, profits

> **Comments:**
> **username_1**: What exactly do you mean by "aggressive"?  
> **username_0**: @username_1 They take every means to make profit. Such as lobbying,  bribing, etc.  
> **username_1**: With your specific example of CNPC, who exactly are they bribing and lobbying if they're the also government? Themselves?  
> **username_1**: What I'm getting at here is that I don't see on what premise you think that state-owned firms would behave any differently with respect to shareholder returns than private firms. They're "aggressive" because they need to make money for the state budget, which is tasked to provide social services more and more people. This is especially true for China where there is a huge population of older people.  
> **username_0**: @username_1 They are stated-owned company but their senior doesn't work in government department. Government and the company has their own interest demands.  
> **username_1**: The seniors don't need to work in government departments. As (former) tax paying citizens, they have a right to social and healthcare services that the state has agreed to provide. Again, I don't understand on what premise you think that there would be no "profit" motive for state-owned firms.  
> **username_0**: @username_1  Yes, I find my premise seems somewhat paradoxical. I'll clear my head and edit the question.  

---

## 1 answers

### Answer by username_2 on 2016-01-08. Score: 1

You have to distinguish between state owned public service companies and state owned for-profit companies, the for-profit companies are really commercial companies with governments being major shareholders. I would not use the term "state owned" in case of the latter form. Governments can form joint-ventures with private and multinational companies. Governments in this instance would have a special investment management agency or just a fund that are formed to attract investments from abroad. And, in every new joint venture, the government is the main shareholder. So, in CNPC's case, government is a proper shareholder just like institutional shareholders. Since Chinese government is the main shareholder it has the majority of voting rights and would certainly want a good return on investment and they are "aggressive in making profit" as you suggest.

In the former case where the companies, if it can be called a company, are formed to provide public services (think of nationalised train companies), they are not there to make profit, but provide low cost high quality services.


---

