ABSTRACT
In Chapter 4, we traced the history of corporate governance as it gradually evolved from a situation where there was no necessity for governance to one where there was a growing need and the basic framework of corporate governance was developed to meet the framework of the market economy. Problems of corporate governance arose because of the rapidly changing economic environment. China throughout the reform period was in a state of flux, of constant and rapid change. What was applicable yesterday was no longer applicable tomorrow; what was the exception yesterday became the norm tomorrow and what were grey areas yesterday became prohibited areas tomorrow. Thus there was much confusion about what to do and what not to do, and directors and managers of listed corporations had to contend with new laws and new regulations which were being promulgated on a regular basis.
