Its complicated but here's sort of how it works.

At the top is the Communist Party and they run the government. Within the government are bureaus and committees who's role are to make economic forecasts, anticipate industrial needs and output, and how to minimize/maximize the national economy with the tools and resources they have on hand. Then those bureaus, committees, and the central party congress issue economic goals and make available funding and resources to achieve those ends.

The Government establishes what we would approximate as privately-operated, State-owned conglomerates that are businesses that own other business. These conglomerates exist for the purpose of being the point of contact between the State and the Economy, and they operate with the goal of producing a profit or an excess of manufactured value across their entire portfolio (not necessarily each business owned). The idea is that the government gives the conglomerate orders to meet the economic goals, then the conglomerates mobilize their various businesses and industries to meet those goals.

Individual businesses don't necessarily have to make a profit or operate in the Black. Their expenses, if in line with the State's economic goals and desires, can be subsidized by the conglomerate and/or the State so that it can provide the necessarily component, service, manpower, job opportunities, etc needed to meet the economic goal. If you're familiar with the way the US Military operates in the field, its a lots like that.

The General up top issues orders to his subordinates about the grand plan he wants to achieve. Each Subordinate then has an area of responsibility, and they use their own initiative to achieve the General's orders within the scope of his intent. This continues all of the way down the chain of command to the NCOs and team leaders who are given orders by their immediate superiors, and then left to achieve those orders according to their own judgement and initiative according to the Commander's intent. The General's orders are carried out and his goals achieved, not because every soldier did exactly what they were told but because they understood what was to be accomplished and they acted within the scope of their command to achieve that goal. Chinese businesses are the same-- they get their orders from their conglomerate, who gets their orders from the Party/State, and everyone works to achieve the State's goals according to their own initiative.