ABSTRACT
This chapter provides an analysis of the corporate governance system in China and offer some suggestions for improvement to make the Chinese market more attractive to foreign investors. Traditionally, the production of goods and services in China has been conducted by State-owned enterprises ("SOEs"). The traditional model of SOE governance could also be referred to as the State-ownership model, or the State-owned and managed model. This model was dominant from approximately 1984 through 1993, when the Chinese Corporate Law of 1993 was enacted. In China, there are three types of foreign-invested corporations: wholly foreign-invested enterprises; Chinese-foreign equity joint ventures; and Chinese-foreign contractual joint ventures. The SOEs Law of 1988 was enacted in connection with the transitional model of corporate governance whereas the Corporate Law of 1993 is aimed at governing modern corporations. The transition from the planned economy to a market economy requires reformation of the composition and function of SOE governance.
