Editor's note: Lin G. is a CGTN economic commentator. The views expressed in this article are the author's own and do not necessarily reflect those of CGTN.

China's latest economic data offer a revealing window into how different ownership structures are contributing to the country's growth. According to the National Bureau of Statistics, China's gross domestic product (GDP) reached 101.5 trillion yuan ($14.2 trillion) in the first three quarters of 2025, up 5.2 percent year on year at constant prices. The figure, slightly above the official full-year growth target of around 5 percent, indicates that the economy is on track to meet its target.

Yet, the more telling insight lies beneath the aggregate number. When disaggregated by ownership type, the data highlight a nuanced distribution of growth momentum across China's economic system:

Private enterprises: +6.1 percent

Shareholding enterprises: +6.7 percent

State-owned holding enterprises: +4.6 percent

If we take the 5.2 percent overall GDP growth as a reference point, these figures outline a differentiated, though not sharply divided, landscape. Some sectors, notably private and shareholding enterprises, are expanding at a pace above the national average, serving as the key engines of growth. 

The return of the private spirit

One of the most significant revelations from the data is the strong performance of private enterprises, which grew by 6.1 percent – comfortably above the national average. This comes after several years in which external commentators questioned whether China was still committed to supporting its private sector.

The current data dispels that narrative. China's private sector remains a major source of growth momentum, benefiting from a series of supportive policies and institutional reforms. The implementation of the Private Economy Promotion Law earlier this year provided a crucial "confidence anchor" for private entrepreneurs. It marks the culmination of decades of reform since the early years of China's opening-up, when private enterprises first emerged under evolving policy support.

Today, start-up companies such as DeepSeek and Unitree Robotics exemplify how Chinese private firms are thriving in frontier industries. These "new-type private champions" underscore a key point: China's business environment for private capital remains fertile, open, and innovation-driven.

State-owned enterprises as the stabilizer of the system

State-owned enterprises (SOEs) grew 4.6 percent in the first three quarters – slightly below the overall growth rate, but their role in China's economy cannot be judged by growth speed alone. SOEs are not designed purely for profit; they serve as the strategic backbone of the national economy, responsible for infrastructure, public services, and critical industries where stability and national security are paramount.

Thus, the slightly lower growth rate should not be read as weakness but as institutional prudence. Their task is to "hold the line" rather than to compete with the private sector for dynamism. From the 4.6 percent growth figure, we can see that SOEs have fulfilled their macroeconomic function while allowing private and mixed-ownership enterprises to drive the front-end of growth.

It would therefore be mistaken to argue that China's economy is experiencing a so-called "state advancing, private retreating" trend. The evidence shows quite the opposite: the private sector is expanding faster than SOEs, while SOEs play their designated role as stabilizer rather than competitor.

The rise of hybrid ownership: China's unique institutional innovation

Among all ownership categories, shareholding enterprises – which grew by 6.7 percent – deserve particular attention. Their growth outpaced every other group, signaling a new phase in China's structural evolution. These shareholding enterprises often reflect minority state participation – private capital generally retains controlling influence even where state capital is present.

This model has emerged as one of China's most distinctive institutional innovations. It blends the dynamism and efficiency of private entrepreneurship with the resource and capital support of state participation. The state does not seek control but rather plays a "supporting" role, providing financial leverage, resource coordination, and implicit confidence to investors and markets.

One practical manifestation of this model is the government-guided investment fund. These funds operate as catalytic capital: the state contributes a portion of the investment to leverage additional funding toward select sectors such as semiconductors, clean energy, advanced manufacturing and artificial intelligence. In this structure, the state functions as an enabler, not a controller.

Another important application occurs in large private enterprises facing generational transition. Many of China's successful private firms were founded during the reform era and are now entering succession cycles. When the founders retire, maintaining continuity becomes a challenge. In such cases, the introduction of limited state capital – usually through local or central investment vehicles – acts as a supportive measure, helping enterprises maintain operational continuity, safeguard jobs, and uphold industrial capacity.

Contrary to some external misinterpretations, this is not "nationalization." The state's participation in these cases is typically non-controlling. The original entrepreneurs and management teams continue to lead the companies, while the state's involvement provides a guarantee against disruptive shocks.

The fact that shareholding enterprises achieved the highest growth rate among all ownership categories underscores the success of China's hybrid-ownership experiment: the country has created a model that combines efficiency, innovation, and stability. The strong performance of these enterprises validates the effectiveness of China's institutional innovation.

A balanced system in motion

This structural configuration – driven by private vitality, supported by state capital, and open to global participation – represents the essence of China's next-stage modernization. Together, these dynamics illustrate how China's economic transformation is evolving from a simple dichotomy between "state" and "market" into a more sophisticated, symbiotic system. The economy is not defined by ownership categories competing for dominance, but by functional differentiation – where each component plays a complementary role in sustaining growth and stability.