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From party/state regulation to "Networking Executives": the crisis of exclusive corporate governance in China

Yang, C. and Sanders, R. (2007) From party/state regulation to "Networking Executives": the crisis of exclusive corporate governance in China. Journal of Contemporary China. 16(53), pp. 681-698. 1469-9400.

Item Type: Article
Abstract: This paper follows well publicised arguments in December 2004 between Gu Chujun, the controversial board chairman of the large Chinese refrigerator maker, Guangdong Kelon Electrical Holding Co, and Lang Xianping, a Hong Kong economics professor, over the drain on state assets resulting from the privatisation of state-owned enterprises. The Kelon affair triggered a nationwide public debate on further reform of state-owned enterprises (SOEs). The exchange of criticism continued after Gu Chujun was detained in the midst of a corporate scandal in August 2005. At the end of the debate, it was asserted by many observers that the Kelon case was a wake-up call to the Chinese authorities and that more aggressive and effective supervision of listed companies was urgently needed to ensure the appreciation of state assets. This article argues that the building of the institutions of corporate government, as a counterpart to the establishment of property rights institutions, has been a creative process within China-in-transition over the past two decades. Yet the Kelon affair reveals a series of accumulated difficulties with regard to corporate governance reform of Chinese publicly listed companies and its associated institutions. Corporate governance institution-building has been moulded, particularly since 1997 onwards, by the neo-classical apotheosis of unbridled meritocracy with private property rights and shareholder-oriented corporate governance mechanisms as its two poles. The analysis indicates that, as a result, corporate governance restructuring of Chinese publicly listed companies has become opaque with one-sided outcomes in favour of managers and local officials, and, as such, inevitably carries the seeds of its own destruction
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD3611 Industrial policy. The state and industrial organization, including municipal services
H Social Sciences > HC Economic History and Conditions > HC94 By region or country > HC427.95 China
H Social Sciences > HD Industries. Land use. Labor > HD2709 Corporations > HD2741 Corporate governance
Creators: Yang, Chen and Sanders, Richard
Publisher: Routledge
Faculties, Divisions and Institutes: University Faculties, Divisions and Research Centres - OLD > Faculty of Business & Law > Business and International Management (to 2010)
University Faculties, Divisions and Research Centres - OLD > Research Centre > China and Emerging Economies Centre
Faculties > Faculty of Business & Law > International Strategy & Business
Date: 1 November 2007
Date Type: Publication
Page Range: pp. 681-698
Journal or Publication Title: Journal of Contemporary China
Volume: 16
Number: 53
Language: English
DOI: https://doi.org/10.1080/10670560701562374
ISSN: 1469-9400
Status: Published / Disseminated
Refereed: Yes
URI: http://nectar.northampton.ac.uk/id/eprint/181

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