ABSTRACT
The reforms of 1978, triggered by competitive pressures from Japan and the West, intensified pressures for market liberalization, foreign capital investment flows and economic growth without loosening the grip of state central planning and control. China also partially opened the capital account to permit foreign direct investment and portfolio investment. Chinese corporations, with dominant state ownership and control, are further undermined by the composition of their boards of directors, one that complicates both organization and management. The Chinese state, without focusing on financial reform, saw the Hong Kong Stock Exchange as a critical resource in predatory corporate growth, rescuing failures through injections of capital. Non-state non-Chinese shareholding remains small despite listing. Chinese securities law, as a contract between seller and buyer of securities, is still heavily oriented towards the interests of the state-owned enterprises. It is clear that China's attempts at improved corporate governance have been a veil to preserve the state, the CCP and a Marxist ideology.
