Originally from The Law and Practice of International Arbitration: Essays in Honor of John Fellas – Preview Page

1. INTRODUCTION 

Modern economies benefit much from state-owned entities (“SOEs”), which shape the daily lives of individuals and economic results. Key pillars of national infrastructure and growth, SOEs are crucial in many countries in the provision of basic public services, including power, water, transportation, and financial support to enterprises. SOEs exhibit considerable diversity in terms of size, operational sector, complexity, sophistication, and degree of government ownership and control. Some entities function as arms of the government, while others reflect a combination of public and private ownership.2 

SOEs have become prominent players in worldwide financial markets in the early 21st century. The 2020 International Monetary Fund (“IMF”) research highlights this trend: the share of global corporate assets held by SOEs among the 2,000 biggest corporations had doubled over the previous ten years, reaching 20%. SOEs owned assets valued around USD 45 trillion, or half of the world’s GDP just in 2018.3 The Organisation for Economic Co-operation and Development (“OECD”) has found that SOEs employ over 9.2 million people worldwide.4 Following the COVID-19 epidemic, this trend even more intensified as several governments entered troubled markets by purchasing equity stakes in companies in financial distress, hence increasing the state’s economic influence.5 By the end of 2022, the public sector accounted for nearly 11% of global market capitalization among listed companies, totaling USD 10.6 trillion. In some markets, state ownership represented over 30% of listed equity.6