The media often focus on events of pomp and pageantry at the expense of other important news. Such is the case with the just concluded state visit by Chinese President Xi Jinping to Washington. The blanket coverage of the U.S.-China summit had the unfortunate effect of overshadowing another significant development: the rollout of a blueprint by the Chinese Communist Party to reform state-owned enterprises.
Of all the reform goals announced by Xi's government, the most critical is the overhaul of SOEs. Employing 63 million people, the 180,000 SOEs account for roughly 40% of China's gross domestic product, based on an estimate by investment bank Goldman Sachs. According to China's Ministry of Finance, the net asset value (assets minus liabilities) of SOEs at the end of 2014 amounted to a staggering 35.5 trillion yuan ($5.57 trillion), equivalent to nearly 60% of GDP.