Company Law Implementation in the PRC – The Rule of Law in the Shadow of the State

Abstract

China has enacted a number of company law statutes since the early 1990s. These demonstrate a commitment to the adoption of the corporate form as a vehicle for business activity. In the 1993 and 2005 Company Laws, and in numerous amendments to these laws, Chinese legislators have shown that they have been well attuned to modern corporate law ideas and concepts.  Nevertheless, these company laws reflect some important Chinese characteristics, such as the dominant role of the Communist Party and of the impact of the state in Chinese companies. Chinese company law has clearly evolved in the shadow of a strong authoritarian state. This has influenced the ways in which these laws have been implemented. This article explores key issues regarding the implementation of company law in China since 1993 and suggests that the language of the law cannot be understood without an appreciation of various institutional constraints upon the effect of company law upon Chinese companies.