State-owned enterprises in China’s emerging hydrogen economy: addressing their first-mover advantages

Hydrogen is becoming an increasingly important part of China’s energy transition strategies. Despite their contribution to the realization of demonstration projects for hydrogen, the first-mover advantages of state-owned enterprises (SOEs), such as market share advantages due to hydrogen policy implementation, are worth noting. Managing SOEs’ potential anti-competitive behaviours resulting from their first-mover advantages is crucial for advancing innovation and investments in the development of China’s emerging hydrogen economy. This article aims to contribute to the legal scholarship on SOEs and clean-energy development and the literature on hydrogen regulation by examining the role of China’s law and regulation in implementing regulatory neutrality in the development of strategic emerging industries. It argues that China’s existing legal framework struggles to curb SOE market dominance in the strategic hydrogen industry. While China has introduced fair-competition reviews to promote regulatory neutrality and curb SOE privileges, this approach still grants significant discretion to state authority by avoiding a clearer definition of ‘public interests’. This analysis has crucial implications for promoting clean-energy development in state-led economies, highlighting the importance of alternative governance tools beyond traditional competition law for regulating SOEs.