China’s corporate sector has become less concentrated since the early 2000s Typically, a more dynamic corporate sector should encourage innovation ‒ but this will be counterbalanced by the restrictive influence of the Chinese state A relatively large share of firms remain in growth, suggesting that the system still generates new expansion opportunities at scale China also has a higher share of firms in shake-out, indicating that competition is active and reallocation is ongoing rather than suppressed Sector dynamics are uneven,