On Wednesday 30 October 2013, Dr Ding Chen of the University of Newcastle gave a presentation entitled ‘Corporate governance problems in Chinese listed companies’. In this seminar, Ding Chen made an important contribution to our understanding of the corporate governance problems in Chinese listed companies.
First she explored the history of state-owned corporationsin China and then she looked at the current corporate governance arrangements in state-owned companies. Although the Chinese government has introduced many corporate governance measures, such as introducing independent directors, restricting controlling shareholder’s votes, Chinese listed companies still suffer from agency problems between management and shareholders, controlling shareholders and minority shareholders.
Second, she argued that the work of Northet al (2009) (‘Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History’) sheds important light on the logic of state-ownership in China. Rent-seeking must be tolerated to a certain extent because it is the glue that binds elites together, at least until a transition to an ‘open access order’ is completed. That will require fundamental political reform. The political economy of China makes any attempt to analyse its corporate governance along Western, neoclassical economic lines extremely problematic.
Finally, she argued that privatization without political reform will result in a disaster, akin to that experienced in Russia and other East European countries. Therefore, it is clear that the corporate governance issue in Chinese listed companies is primary a political issue and it can only be sorted out politically.
The seminar was well attended by staff and students from the law school. Despite their different backgrounds, there was a great deal of interests in the topic. At the end of her presentation, a lively discussion followed, with Ding Chen answering questions from students. After her speech, Dr Ding Chen talked to us and encouraged us that, ‘Frankly speaking, as an international student, it is too hard to study law using different language. At the beginning, I felt so bad studying in Sheffield because I did not understand what they (local people) were talking about. Luckily, I met several kind-hearted teachers in Sheffield who gave me so much help. Now I am so happy I can be the guest of Sheffield Law School and give a research presentation here.’
Dr Ding Chen studied for an LLM at the University of Sheffield School of Law in 2004, after which she completed her Ph.Dat the University of Manchester where she also did some part-time law teaching. In 2013, she joined the University ofNewcastle Law School as a lecturer.
Report by Rong Fu current LLM Corporate and Commercial Law student