However, the unique role of CSOEs as a strategic tool in China's external relations does not mean that they completely ignore commercial incentives as CSOEs are also tasked to maximize corporate revenues, and many of their investment decisions are guided by market principles.
Chinese CSOEs and the state share similar visions and interests in the South China Sea.
There are also differences in the ways CSOEs respond to the policy needs of the state.
According to Liu Junli, the Manager of CCCC Oceanic Investment, a subsidiary of CCCC, it was necessary for CSOEs to develop China's cruise industry and overcome the technological advantages enjoyed by foreign cruise companies.
These activities suggest that these CSOEs were able to take advantage of the state's incentive policies for commercial purposes.
Recognizing that Hainan and even Sansha City could become a hub for tourism connecting Northeast and Southeast Asia, the three CSOEs sought to collaborate with Hainan Province to develop the Sanya cruise terminal.
In contrast, CSOEs belong to the central government and are not subordinate to any local governmental.
We begin by examining the ratios of CSOEs, LSOEs, and PROEs to the full sample of firms in the left-hand side of Panel A of Table II.
We examine the impact of government intervention on the investment allocations of all enterprises, CSOEs, LSOEs, and PROEs.
In contrast, government intervention has little effect on the fixed asset and equity investments of CSOEs and PROEs.
In contrast, the effects of CSOEs and PROEs on fixed asset and equity investment are found to be nonsignificant across all specifications.
Further, we examine the effects of government intervention on firm investment allocations under different types of ownership, where we use the interaction term between government intervention and LSOEs, CSOEs, and PROEs.