what is a state owned enterprise 
a state owned enterprise soe is a legal entity that is created by a government in order to partake in commercial activities on the government s behalf it can be either wholly or partially owned by a government and is typically earmarked to participate in specific commercial activities soes are common across the globe including in the united states where mortgage companies freddie mac and fannie mae are considered government sponsored enterprises gses understanding state owned enterprises soe also known as government owned corporations goc state owned entities should not be confused with listed companies with stocks that are owned in part by a government body as these companies are truly public corporations that happen to have a government entity as one of their shareholders the state owned enterprise soe is a global phenomenon and such organizations exist in the united states china south africa norway and new zealand legally most soes qualify as business entities providing them with all the rights and responsibilities associated with them this means that they are normally required to follow any laws and regulations governing the operation of their business type and they can also be held liable for their actions the current value of state owned enterprises assets worldwide as of 2020 according to the international monetary fund imf the figure reflects a huge jump in size for soes over the last few years with emerging markets leading the charge state owned enterprise examplewithin the united states mortgage companies freddie mac and fannie mae are some of the most recognized soes by its citizens but soes are not limited to lending in china several companies have state backing such as the jin jiang hotel which is owned and controlled by the government of shanghai the south africa based power utility eskom is the 11th largest company in the world in terms of electric generating capacity and it is an soe of the south african government many public transportation systems and utilities are soes as are postal services and some mining operations soes and corporatizationat times an soe is created out of a government agency through a process called corporatization this allows the agency to convert itself into a for profit business often the newly formed soe still operates with government goals in mind but officially it operates as a commercial enterprise sometimes governments of developing countries will create a state run business in a sector that it wishes to develop or exploit to boost their economic standing on the global stage such as the oil industry in brazil or the telecom industry in argentina soes and profiteven though an soe is a for profit business entity there are some that do not produce a profit for example the u s postal system may be operating at a loss for long periods of time while some soes may be permitted to fail those of importance to the operation of the state may receive government funding to continue its operations particularly those deemed as critical to a country s infrastructure in these cases the soes actually cost the government money instead of generating revenue in the case of china this has led some to accuse the government of artificially propping up so called zombie corporations that would otherwise go out of business 