The advance of the state in China long predates the Global Financial Crisis of 2008–9. To be sure, the reversal of fortunes in the state sector and the rapid ascent of the SASAC national champions up the ranks of the Global 500 has taken many by surprise, including policymakers in Beijing. But these outcomes were, in fact, envisioned, if perhaps not wholly expected, by the architects of the large enterprise strategy and successive industrial policies. This manuscript has narrated the incremental process through which this vision was assembled and has detailed its far-reaching impact on the pathway of two unlikely entrants into the ranks of the lifeline industries, airlines and telecommunications. While the two big ‘I's’ of comparative political economy scholarship – institutions and interests – give us some insight into the causes behind this development, the focus on ideas presented here helps to unravel some of the more puzzling aspects of state advance in China.

Institutions are the rails upon which the state has advanced. As previous works have shown (Nolan 2001; Sutherland 2001, 2003; Fischer 1998; Keister 2000), industrial policies that took shape from the mid 1980s in support of large enterprise groups provided the first loose outlines of China's ‘refurbished’ state capitalism (McNally 2013). Later refinements under SASAC's tutelage employed the tools of managed competition to support the national team ‘going big and going strong’. In markets gated with high regulatory barriers to entry and with ready access to both soft loans from state-owned banks and scarce state-controlled resources including land, many SASAC enterprises have enjoyed booming profits over the last decade and a half. When the Global Financial Crisis of 2008–9 descended, bringing crisis to non-state enterprises accustomed to thinner margins, the opportunity for central SOEs to take over struggling private enterprises was ripe.

Interests have also supplied momentum. As the case studies of telecommunications and airlines have shown, particularist interests opposed to liberalization and increased competition in the state sector have definitively shaped state sector policy at key junctures. In the manner of Hellman's (1999) short-term winners, during crucial reform debates in the late 1990s, state-owned enterprises and their patrons in government pushed for policies that would minimize competitive pressures and maximize their intake of monopoly profits.