China’s state monopolies survive alongside a cut-throat private sector. The recent announcement of China Minmetals merger with MCG and this year’s mergers of China North Rail with China South Rail have fuelled ongoing speculation about the further consolidation of China’s state sector. These mega-mergers feed the perception that China is pursuing ‘state capitalism’ dominated by massive state monopolies. But other economists, emphasising the triumph of private markets, argue that the dominance of state-owned enterprises (SOEs) is a misconception. A close look at China’s industrial data shows that while manufacturing is private-sector led and highly competitive, resources and utilities are in state hands and much more likely to be concentrated.