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A Study on the Transition Process of Corporate governance structure in People's Republic of China

  • The Journal of Northeast Asia Research
  • Abbr : NEA
  • 2017, 32(1), pp.149-178
  • DOI : 10.18013/jnar.2017.32.1.005
  • Publisher : The Institute for Northeast Asia Research
  • Research Area : Social Science > Political Science > International Politics > International Relations / Cooperation

SangYoun Lee 1

1호서대학교

Accredited

ABSTRACT

Chinese government has been trying to practically separate government functions from enterprise management, and has been carried out the reforms of corporatization of State Owned Enterprises. Despite all these efforts, there are serious difficulties including excessively high Share-holding Ratio of Chinese government, different types of power to control Chinese State Owned Enterprises, and the features of bureaucracy surrounding the appointments of senior managers in Chinese State Owned Enterprises. In the Corporate governance structure of Chinese State Owned Enterprises, the Communist Party Committee organization has been playing the most important role, and it is always first and foremost. Chinese government has already succeeded in working out some ground rules explaining the way how the Communist Party Committee organization lead an entire SOE and senior managers operate a SOE on a daily basis, and has been thinking that these ground rules are the unflappable discipline. As the results of the case studies of SAIC Motor and FAW showed, if it is necessary to have ultimate and actual control over Chinese SOEs in certain industries, Chinese government has been trying to retain the large equity stake. The results of the case studies of FAW and SAIC Motor demonstrated that there have been three different types of influences from the Communist Party Committee organization, management team and the board of directors in the governance structures of SOEs, considering there exist the powerful influences of Chinese government, government ministries and the State-owned Assets Supervision and Administration Commission, it can be one of the appropriate and reasonable choices to double as the Secretary of Party Committee and Chairman of the Board.

Citation status

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