Innovation ability has become an important factor affecting the global competitiveness and sustainable development of state-owned enterprises (SOEs) in China, particularly during the COVID-19 period. This study examined the association between heterogeneous shareholders and SOE innovation, in addition to the moderating impact of corporate governance characteristics and the COVID-19 pandemic on this association. Using data from Chinese A-share listed mixed ownership enterprises (MOEs), we found that the mixed ownership reform of SOEs positively affected firm innovation compared to other MOEs by reducing agency costs, indicating that the manager view channel was proven. We also found that heterogeneous shareholders resulted in more innovation output in state-owned holding mixed ownership enterprises (SHMOEs) with affiliated managers, in those audited by lower reputation accounting firms or that had a lower external marketization, or during the COVID-19 period. The implications of this study are of importance for improving heterogeneous shareholders’ active participation in the mixed ownership reform of SOEs.

The COVID-19 pandemic subjected firms to liquidity pressure and financing difficulties. Our study examines bank credit availability in response to the pandemic by testing the firm’s interest expense stickiness. We found that interest expense stickiness was widespread in Chinese listed firms, particularly in state-owned enterprises and large firms. Moreover, interest expenses were stickier during COVID-19 compared to before COVID-19. Interest expense stickiness gradually increased in private and small firms after the COVID-19, indicating that banks provided more credit support for these firms after their sharp revenue declines. Finally, we found that the stronger interest expense stickiness could improve firm’s performance.

During the Trump administration (January 2017 to December 2020), the United States formulated the “Indo-Pacific Strategy” and officially established a strategic competition with China throughout the government. The strategy aimed to woo allies and partners in the Indo-Pacific region and accelerate the construction and promotion of the “Quadrilateral Security Dialogue”. India, as the “world's largest democracy”, has unresolved border issues with China, making it a key target for the United States to woo, and thus forcing India to change its foreign policy. On February 11, 2022, the Biden administration introduced a new version of the “Indo-Pacific Strategy”, which further clarified the overall framework of strategic competition with China, continued to deepen the strategic setting with the prominent features of wooing allies and confronting China, emphasized the core role of the Quad and the central position of ASEAN countries, highlighted the military deterrence of the US-UKAustralia alliance, and created an “anti-China circle” in multiple fields such as biosecurity, science and technology, economic finance, and climate change. Although India is the founding country of the Non-Aligned Movement and has long relied on “independent and autonomous” foreign policy, the current new geopolitical environment where Sino-Indian relations are at a low point due to the border issue, Russia-Ukraine conflicts continue due to NATO's eastward expansion, and the rapid development of the Quad, signifies the power balance in the Asia-Pacific and Indian Ocean regions. This also indirectly reflects the progress of India's own “Indo-Pacific Strategy” and the implementation of the US “Indo-Pacific Strategy”, thus providing a dimension for predicting the development trend of the strategic competition between China and the US.