ABSTRACT
Some of China’s large enterprises have run into problems recently, and particularly large State-Owned Enterprises. The State Council asked specially designated inspectors to look into the problems, and they discovered certain universal features. As a result, everybody is now talking about the leadership system in enterprises, external supervision, preventing abuse of power, “each taking care of its own children” (self-rule), and so on. I believe that a number of economic concepts might be useful to our reform at this point, particularly with respect to corporate governance.
