Modelling an Effective Corporate Governance System for China’s Listed State-owned Enterprises: Issues and Challenges in a Transitional Economy

Jiangyu Wang

Associate Professor, Chinese University of Hong Kong

Lay-Hong Tan

Associate Professor, Nanyang Technological University

jcls Vol 7 Issue 1 (April 2007)

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Abstract

The purpose of this paper is to construct a suitable model of corporate governance for China’s listed companies that were formerly state-owned enterprises (ie listed SOEs). The paper first identifies the corporate governance problems in China’s listed SOEs. It is then followed by an examination of the suitability of the insider/outsider systems of corporate governance as a model for China’s listed SOEs in light of China’s current political, economic and social conditions. Drawing from the Singapore’s model of corporate governance for its government-linked companies, the paper concludes with a proposal to adopt the Singapore’s ‘Temasek’ model as a system of corporate governance for China’s listed SOEs.

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