The CPC presides over a large state-owned economy, which is a key pillar of China’s state capitalist model and a critical source of Party power. The party has adapted its governing strategies of the state-owned sector to maintain its economic dominance without stifling growth and innovation – largely by learning from outside. We highlight the importance of the international system as a source of both policy inputs and pressures to change. We find that in the early phases of China’s marketization process during the 1980s, Chinese policymakers looked to Japan and the World Bank as they restructured state-owned enterprises. In the 1990s, American, European, and Japanese policymakers’ pressure on China to downsize its state sector as a condition of WTO accession was a key consideration in Chinese policymakers’ efforts to build “national champions” capable of competing with foreign multinationals in domestic and international markets. We analyze Chinese leaders’ responses to successive challenges in the state-owned economy, and the resilience of state capitalism which buttresses party rule.