I'm not sure this is entirely the case, although it's certainly a very important factor.I think China’s a large part of their price advantage comes from their buying power.
I've worked on deals in China with a lot of the large SOE's, particularly on the energy side. The really, really weird thing with SOEs is that they aren't mono-culture.....and by that I mean that a steel manufacturing SOE will also own other, substantial and totally unrelated businesses. One large energy SOE we did a deal with also owned most of the Bank of Beijing, and IT research company, a hotel company etc etc. It's quite weird. From what I've seen, the profitable businesses fund the less profitable to ensure that the "5-year plan objectives" are met. It seems to work for them.