How will ownership in China's industrial sector evolve with WTO accession?

What changes will WTO accession bring to China's industry? Will it cause la rge state firms to be stronger or weaker, and if so, how? The paper applies the market structure theory to develop a tool called the market-share test ing principle to answer these questions and to analyze ownership evolution in China's industry. Our main finding is that many large state firms will s urvive, and their survival strategy will involve changing from being wholly state-owned and state-controlled to diluted state ownership and reduced st ate control. This partnership with the private sector will get them the fun ding, technology, and improvements in corporate governance that will enable them to grow. WTO membership will accelerate the emergence of a greatly di versified ownership structure. (C) 2001 Elsevier Science Inc. All rights re served.