The Political Logic of Corporate Governance in China’s State-Owned Enterprises

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The Political Logic of Corporate Governance in China’s State-Owned Enterprises

JiangYu Wang

National University of Singapore (NUS) – Faculty of Law

December 1, 2014

Cornell International Law Journal, Vol. 47, No. 3, 2014 

This paper adopts a political approach to analyze the relationship between the state and state-owned business in China, focusing on the corporate control and governance of state-owned enterprises (SOEs). It aims to explain the political logic behind the Party — state’s achievements in introducing market reforms through communist political institutions and to discuss their implications for future SOE reform in China. It argues that SOE reform is part of the CCP’s effort to rebuild and maintain political legitimacy of the Chinese Party-state. In other words, the management of legitimacy to strengthen the ruling position of the CCP is embodied in all major aspects of the governance structures of SOEs. Corporate governance in Chinese SOEs is a system in which the components come from different countries of origin, but are installed together to ensure the whole system runs in a way that not only economically benefit the owner but also stay within the owner’s control.

Number of Pages in PDF File: 40

Keywords: China, SOE, state-owned enteprise, corporate governance, CCP, legitimacy management

JEL Classification: K22, P26, D72


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