The Company Law and Foreign Investment Enterprises in the People’s Republic of China: Parallel Systems of Chinese-Foreign Regulation

University of New South Wales Law Journal, Vol. 30, No. 3, pp. 774-785, 2007

Sydney Law School Research Paper No. 09/42

12 Pages Posted: 29 May 2009  

Vivienne Bath

The University of Sydney Law School

Date Written: May 26, 2009

Abstract

Chinese law relating to companies and corporate regulation has developed significantly since Chinese-foreign joint ventures were first permitted in 1979. For foreign investors, however, changes and improvements in the Company Law regime, have not necessarily improved their position. Despite moves by the State Council in 2004 to simplify the approval regime (now a 'verification' regime) for investment, foreign investors are still tied to the traditional forms of foreign investment entity. The intention of Chinese regulators is clearly to maintain the traditional differentiation between Chinese companies and foreign investment enterprises even though many of the advantages accorded to foreign investment enterprises have been eroded over time. This article examines moves by Chinese authorities to bring foreign investment enterprises more comprehensively within the regulatory scope of the Chinese Company Law by such measures as requiring them to appoint supervisors and the question whether these constitute a real move towards convergence of fully Chinese companies and foreign investment enterprises.

Keywords: China, companies, corporate governance, foreign investment law, convergence of legal regulation, supervisors, government regulation, comparative law

JEL Classification: K1, K22, K3

Suggested Citation

Bath, Vivienne, The Company Law and Foreign Investment Enterprises in the People’s Republic of China: Parallel Systems of Chinese-Foreign Regulation (May 26, 2009). University of New South Wales Law Journal, Vol. 30, No. 3, pp. 774-785, 2007; Sydney Law School Research Paper No. 09/42. Available at SSRN: https://ssrn.com/abstract=1410383

Vivienne Bath (Contact Author)

The University of Sydney Law School ( email )

New Law Building, F10
The University of Sydney
Sydney, NSW 2006
Australia

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