Chinese Corporate Governance

History and Institutional Framework

Yong Kang, Lu Shi, Elizabeth D. Brown

ResearchPublished Nov 12, 2008

The Chinese economy has been growing rapidly in recent years, as the nation has moved toward a stronger role for private enterprise and capitalism. As China has aligned itself more closely with the international economy, it has also sought to adopt more Western-style oversight mechanisms and legal standards concerning the operation of its corporations. Corporate governance is critically important to a country's economic growth and stability, because it provides the credibility and confidence in management that is fundamental to capital markets. There has been sparse scholarly research on Chinese corporate governance to date, and this report begins to address this gap by providing an overview of corporate governance mechanisms in China. Kang, Shi, and Brown review the history of Chinese corporate governance; discuss eight pillars that make up the institutional framework for Chinese corporate governance; and identify problems associated with Chinese corporate governance, their policy implications, and areas for further research.

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Kang, Yong, Lu Shi, and Elizabeth D. Brown, Chinese Corporate Governance: History and Institutional Framework. Santa Monica, CA: RAND Corporation, 2008. https://www.rand.org/pubs/technical_reports/TR618.html.
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This research was conducted within the RAND Center for Corporate Ethics and Governance, which is part of the RAND Institute for Civil Justice.

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