ABSTRACT
This chapter uses terminology translation of Chinese corporate law to illustrate how different policy concerns and knowledge gaps shape the concepts in legal transplantation. It explores terminology translation in Chinese corporate law to demonstrate how local contexts have caused mistranslation and how mistranslation caused unexpected consequences in legal transplantation. It argues that government policy concerns impose different understandings of legal texts, especially in Chinese corporate law, and this impacts on legal translation or transplantation. This chapter demonstrates how the usage of the Chinese translation of the word “company” expanded from the East India Company to general business organizations, then to state-related enterprises, and finally to former government organizations. The Chinese translation had the additional meaning of “public monitoring”, which indicates a close relationship with state power. However, this mistranslation sent wrong signals to the market as it implied a state guarantee, and there were increased transaction costs as the state imposed high capital requirements. The avoidance of politically sensitive terminology, the question of “ownership rights”, and misunderstandings such as shareholders being “owners” of a company, demonstrate how political concerns cause adaptive translation. Once terminology has been misused, it creates a path dependence effect. This chapter argues that China should use different terminologies to differentiate between companies with state connections and privately owned companies and should also provide different legal arrangements.
