Protecting the State from Itself? Regulatory Interventions in Corporate Governance and the Financing of China's 'State Capitalism'

Abstract

From the start of China’s "corporatization without privatization" process in the late 1980s, a Chinese corporate governance regime apparently shareholder-empowering and determined by enabling legal norms has been altered by mandatory governance mechanisms imposed by a state administrative agency, most often to protect minority shareholders against exploitation by the party state controlling shareholders which are the accepted powers of "state capitalism." This chapter reviews the path of that benign intervention and the structural reasons for it, and then speculates on why this novel identity of the Chinese party state’s "fragmented authoritarianism" continues to be tolerated by the same party state, and indeed how it is necessary for the continued financing of China’s "state capitalism."

Keywords: corporations, corporate law, corporate governance, securities regulation, China, PRC, Chinese law

JEL Classification: G18, G28, G34, G38, K22, K23, N25, N45, P26, P30, P34