Contemporary debates about the role of the state in the economy in China usually center on the role of SOEs, including whether Chinese state capital differs from global financial capital and on the willingness and capacity of the CCP to reform (usually meaning liberalize) SOEs. Recently, observation of the phenomenon of “the state advances and the private retreats” (国进民退) has centered on state-owned firms. The focus on state-owned enterprises (SOEs) or the “state sector” has neglected another ascendant and novel form of state power in the economy, namely financialization. Our paper tracks the deployment of state capital in private enterprises since the establishment of China’s equity markets in the early 1990s. While most observers date this phenomenon to the stock market turmoil in the 2015-2016 period, we find state capital entry into the private sector in stages, beginning in the early 2000s. We hypothesize the logic of extending state shareholding to the private sector (better monitoring and disciplining of business) and its potential effects (resource misallocation, international backlash, ability of the state to manipulate prices). We first look at macro data to estimate the extent of state shareholding in the private sector and then analyze the trajectories of several state shareholding firms.