ABSTRACT
The resumption by the People’s Republic of China (PRC) of sovereignty over the former British territory of Hong Kong has posed perhaps the most acute example of the major problem facing business law throughout Asia. The pursuit of the establishment of the rule of law in Asian company law reform presently seems to threaten a markedly sub-optimal welfare outcome. Indonesia, the PRC and Pakistan are the three most corrupt countries according to the index, and the Asian countries are all clustered at the top of the index by comparison to the west European countries and the United States of America. As expressed by the World Bank, the development of Asian countries is handicapped by the uncongeniality of the ‘climate’ they provide for capitalist enterprise. Translated from economic theory into concrete legal policies, this view of the relationship between law and development leads to the strong advocacy of the extension of the rule of law.
