Chapter

The Interaction between Capital Markets and Corporate Governance of Chinese Listed Companies

Leng Jing

in Corporate Governance and Financial Reform in China's Transition Economy

Published by Hong Kong University Press

Published in print June 2009 | ISBN: 9789622099319
Published online September 2011 | e-ISBN: 9789882206786 | DOI: http://dx.doi.org/10.5790/hongkong/9789622099319.003.0005
The Interaction between Capital Markets and Corporate Governance of Chinese Listed Companies

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The term “capital markets” refers to the stockmarket in China and overseas as the country's listed companies utilize equity financing for capital accumulation. The country's stockmarket during the transition period represents a promising financial institution that contradicts China's “socialist market economy.” This contradiction is reflected in the state's aspirations of acquiring foreign and private capital that may strengthen the financial base of firms through adopting full privatization. The Chinese government has been able to create a properly functioning stockmarket as the economy's commanding heights were still dominated by state monopolies. As such, the stockmarket's inefficiency was attributed to political logic remainin the dominating theme. This chapter shows how an improved stockmarket is able to bring about significant and good impacts not only on the state-owned enterprise sector but on the banking system as well.

Keywords: capital markets; banking system; state-owned enterprise sector; stockmarket; full privatization; state monopolies; commanding heights; foreign and private capital

Chapter.  28234 words. 

Subjects: Business and Management

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