Institutional investors in China: An autochthonous mechanism unrelated to UK-cum-global stewardship

Publication Type

Book Chapter

Publication Date

1-2022

Abstract

This Chapter demonstrates that institutional investors have become an important vector in China’s autochthonous corporate governance model, which can no longer be ignored. To accurately understand the role of institutional investors in Chinese corporate governance and how effective they are in improving corporate governance in China, these developments must be understood on their own terms – in China’s unique political-economic context in which the Chinese Communist Party (CCP) has ultimate control. The same is true for understanding how Chinese companies and institutional investors fit into the CCP’s broad-based campaigns to address social inequality and improve the environment. The Chapter concludes that to see these developments as part of a UK-inspired ‘global shareholder stewardship’ movement, would make Western pundits seem like the proverbial woman who only has a hammer and sees everything as a nail. In arriving at this conclusion this Chapter reveals how the CCP has actively and gradually promoted the growth of domestic institutional investors, in terms of types and size, through relaxation of policies and law reforms to improve corporate governance and stabilize the stock market, while limiting the influence of foreign institutional investors. It further analyzes all the Activist Campaigns undertaken by institutional investors in China and maps the network of government bodies, regulations, and tactics that the CCP has developed to directly and indirectly control State-Owned Institutional Investors (SOIIs) and Private-Owned Institutional Investors (POIIs) for the purpose of policy channelling.

Keywords

Chinese corporate governance, institutional investors, comparative corporate governance, Chinese Communist Party, varieties of capitalism, shareholder stewardship in China

Discipline

Asian Studies | Business Organizations Law

Research Areas

Asian and Comparative Legal Systems

Publication

Global Shareholder Stewardship

Editor

KATELOUZOU, Dionysia; PUCHNIAK, Dan W.

First Page

379

Last Page

416

ISBN

9781108914819

Identifier

10.1017/9781108914819.019

Publisher

Cambridge University Press

Additional URL

https://doi.org/10.1017/9781108914819.019

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