Abstract: State-owned enterprises (SOEs), private enterprises (PEs), and foreign-funded enterprises (FFEs) (collectively referred to as the “three types of enterprises”) have undergone dramatic fluctuations in the historical process of PRC. Currently, they have formed a layout with over 200,000 FFEs, more than 1 million SOEs, over 20 million PEs and other types of enterprises, serving respectively as the new force, main force, and auxiliary force of China's economy. Traditional socialist theory faces three dilemmas in interpreting the “three types of enterprises”: the realization of the idealized public economy, the inability to eliminate the private economy, and the organizational form of free labor associations. Although Hayek's neoliberal theory embraces rational elements of a market economy, it creates three myths that private enterprises are inherently more efficient than state-owned enterprises, that private enterprises bear an innovative spirit, and that mixed-ownership enterprises are economically unviable. The socialist enterprise economic theory with Chinese characteristics overcomes the theoretical limitations of the former and debunks the myths of the latter. To guide the healthy development of the “three types of enterprises”, their functions should be positioned based on the fundamental institutional attributes, their behaviors should be regulated according to market economy principles, their division of labor should be structured based on comparative advantages, their industrial systems should be formed with a focus on the security of industrial and supply chains, and tailored governance mechanisms should be established for each type of enterprise. Only by adhering to the socialist theory with Chinese characteristics can policy oscillations be avoided in guiding the development of the “three types of enterprises”.

Key words: socialist enterprise economic theory with Chinese characteristics, state-owned enterprises (SOEs), private enterprises (PEs), foreign-funded enterprises (FFEs), high-quality development