Transferability of English Legal Concepts and Skills in China with Respect to Corporate Regulation
Georges Depeyrot (ed.) WHEN ORIENT AND OCCIDENT MEET (Moneta, Wetteren 2014) pp.337-52.
27 Pages Posted: 14 Jun 2014
Date Written: June 12, 2014
Revisions to the company law and securities law in China in 2005 have incorporated a number of features found in the Anglo-American model. For example, the new company law allows companies to use cumulative voting, a type of voting process that helps strengthening the ability of minor shareholders. This is actually incompatible with the existing ownership pattern of Chinese companies, which are predominantly owned by families or the state. Also, following the trend of codification of fiduciary duties of company directors in common law jurisdictions as seen in England, Australia and Hong Kong, Chinese company law similarly has put a duty of loyalty for directors on a statutory footing. Furthermore, a shareholder derivative action, long available in the UK and US, has been introduced to allow shareholders to sue the directors on behalf of the company. All these imply that English lawyers may readily apply their legal skills in China amid the harmonisation of Chinese laws towards the Western system. Yet, this does not take into account the transplant effects. It is straightforward to copy laws from other jurisdictions, but whether and how these transplanted laws can be enforced is another problem. This necessitates an investigation of the quality of domestic legal institutions such as courts, judges and lawyers, as well as the underlying political, cultural and economic factors.
Keywords: China, company law, legal transplant
JEL Classification: K22, N25
Suggested Citation: Suggested Citation