The Governance Structure and Innovation System of Chinese State Firms after the Fundamental Reform: The Mid of 1990s to the First Decade of 2000s

After the fundamental reforms, Chinese state firms' governance structure is similar to the coordinated firms' governance structure in coordinated market economies (CMEs) (like Japan, Germany and other Germanic countries). Therefore, the coordinated firms' governance structure in the Chinese state sector generates the organizational competitiveness and the coordinated type of innovation system as that in the CMEs. FDI and technology transfer from CMEs to China drive the convergence of the Chinese state sector towards CMEs. It contributes to the superior performance and technology modernization of the Chinese state sector. The reform of the state firms also makes the state play the coordination role in the technology modernization based on its controlling shareholding in the state firms.