Comparative Corporate Governance in China »

An insightful overview of the political, legal and social perspectives which inform corporate governance in China, this book examines the challenges of corporate governance faced by Chinese corporations and international corporations operating in China.

Unlike other texts that tend to focus solely on the board of directors and the takeover market, Yu has enlarged the scope of this study to cover both market forces and contractual mechanisms, providing readers with an extended and comprehensive discussion of the pertinent issues.

It explores a range of issues and their role in corporate governance models, including:

• executive compensation


• takeover markets


• the securities market


• insolvency issues


• venture capital market

Examining the current climate and making the case that comparative corporate governance studies have significant policy implications for China’s transitional economy, Yu has put together a book that is a valuable resource for students and those working in Asian business, corporate governance and commercial law.

Preface     ix
The relevance of comparative corporate governance studies     1
The nature of the problem     1
Agency costs and monitoring devices     4
Comparative studies of monitoring devices     13
The relevance for China     23
Conclusion     35
The problem with the transplantation of Western law     37
Introduction     37
The political goals of controlling the large SOEs     38
The use of an English-style takeover law     41
Weak enforcement of the law on securities fraud     54
Conclusion     64
The proper role of government in building a venture capital market     66
Introduction     66
Economic significance of developing a venture capital market     67
Comparative study of two distinctive venture capital models in the world     69
The significance of a developed stock market     71
Developing a venture capital market     76
Further steps in developing the venture capital market     83
Conclusion     89
The case against uniformity in corporate governance     90
Introduction     90
The search for a best model     90
Transplantation and adjustment of an English-style takeover law     95
Conclusion     108
The regulation of executive compensation     109
Introduction     109
The development of, and restrictions upon, executive compensation     110
Tax restrictions on executive compensation     112
Legislative requirement of disclosure of executive pay     114
The regulation of executive compensation     118
Conclusion     122
Towards a functional approach to comparative corporate governance studies     124
Introduction     124
The search for an optimal model     124
A cautious approach to using economic performance as a judgement criterion     130
Increased options and institutional competition within a country     137
Conclusion     145
Notes     146
Index     187