Adoption of Foreign Corporate Governance Practices
Also, a new body of government was created, the China Securities Regulatory Commission (CSRC) (Cornforth 2011). This was created for the regulation of a new stock market.
The next ten years had been seeing the development and emergence of a modern structure for enterprises, as the first Company Law was passed by China. This law contributed in the delineation of rights and responsibilities for corporations. There was a clear observation on the facts regarding the investments being made in the stock markets of China, surging in this duration of time. Irrespective of these reforms, shareholders of the state seemed to enjoy the overwhelming favouritism instead of individual or personal investors. In the year 2006, implementation of the first set of new policies was done by China (Brennan 2010). The intension of these policies was to be able to address the continuing imbalance in power amongst individual and state shareholders.
Until recent times, corporate governance had been seen to be different within individuals of Republic of China. This was mostly due to the economic structure of the country. Particularly, large scale corporation were owned by the state that meant that managers of the firm were accountable and responsible towards both, business matters as well as goals of the state policy.
There has been a rapid growth in the economic reforms of China since the previous three decades. In the same duration of time, development of policies has been done by China for creation of Foreign Corporate Governance and mechanisms of foreign-style oversight. This has been done in an attempt for improving confidence of public within the markets in China and Abroad. Irrespective of this progress, mechanisms of corporate governance within China have stayed weak. China has faced a number of obstacles that have been identified by analysing the two articles provided. These obstacles include immature markets of capital, weak mechanisms for controlling false disclosure of finance, rampant trading by insider, low level of independence amongst the Boards of Directors, and immense concentration on ownership of state.