Euro-Chinese Company Models: An Exploratory Journey into the Position of Directors, Shareholders and Stakeholders in Chinese and European Company Law
| Published date | 01 June 2009 |
| Date | 01 June 2009 |
| DOI | 10.1177/1023263X0901600203 |
| Author | Mieke Olaerts |
| Subject Matter | Article |
16 MJ 2 (2009) 171
EURO-CHINESE COMPANY MODELS:
AN EXPLORATORY JOURNEY INTO THE
POSITION OF DIRECTORS, SHAREHOLDERS
AND STAKEHOLDERS IN CHINESE
AND EUROPEAN COMPANY LAW
M O*
ABSTRACT
is paper examines the Chinese company model and compares it to its European
counterparts. It describes the foundations of Chinese Company Law and uses them as
a starting point for an explanatory journey. e revision of the Chinese Company Law
entails a growing importance of its prov isions for foreign investors. Article 218 of the new
Company Law extends the applicab ility of the Law to foreign-invested companies. Despite
its similarities with other jur isdictions, Chinese Company Law is unique in its approach.
It intertwines legal transplants with fundamental principles of a more Chinese nature.
European investors in China should be well aware of these ‘typically Chinese principles’
since they in uence the perce ption of companies in Chinese society. It goes without saying
that these rudiments of Chinese Company Law a ect the corporate goal which in its turn
has an in uence on the internal structure, management and external relations of the
company. is paper examines the applicable company model in China and compares it
to the existing company models in Europe. It focuses on the in uence of these (company)
models on the position of directors, sharehold ers and stakeholders.
Keywords: Chinese C ompany Law; European Company Law; st akeholders; shareholders;
directors
* M. Olaerts works a s an Assistant Profess or at the Department of Pr ivate Law of Maastricht Univers ity.
Mieke Olaerts
172 16 MJ 2 (2009)
§1. I NTRODUCTION
Chinese Company Law is an increasingly important subject for comparative research
due to China’s growing status on the world economic stage. Its r apidly growing economy
has attracted businessmen and potential investors around the world. e increased
movement in capital and cross-border investments between the world’s East and
West necessitates a closer examination of the similarities, di erences and history of
company law in those countries. e business activities of companies in a globalizing
world are no longer restricted to the country of their incorporation or the European
territory. A shared understandi ng of each others basic legal system and their underly ing
principles is therefore indispensable. e rst major contrast between European and
Chinese company law lies in t he establishment and subsequent development of its laws.
Compared to most European countrie s, Chinese company law i s relatively new. e rst
company law of the Peoples Republic of China was promulgated by the Eig hth National
People’s Congress only in 1993. However, prior to that the laws on foreign-investments
already referred to the concept of lim ited liability.1 A comparison between Europea n and
Chinese company law is not only of importa nce to potential investors who want to know
what their rights and responsibi lities are when investing in a company incorporated i n a
di erent legal sy stem but also to national as well as Europe an legislators and scholars. It is
particul arly interesting to compare how highly controversial topics du ring the European
harmonization process were dealt with under China’s emerging corporate jurisdiction.
For example, where choices made in the European ha rmonization of company law were
most likely in uenced by a need to nd a compromise between ancient lega l traditions in
di erent Member States, Chi na might have had more freedom of choice and opportunity
to learn from other systems. Additionally, discovering Chinese company law is also a
journey that forces scholars to re ect upon the e cacy of the European legal system.2
To a certain extent, one could argue that common law and civil law come together
in China. China is a civil law system nevertheless adopting some important Anglo-
American concepts.3 Chinese legal practitioners, scholars and all those involved in the
application and interpretation of the law ca n also bene t from the European experience s.
Since China is such a ‘young’ legal system when it comes to company law, it might need
some time to get acquainted with the di erent legal concepts and their i mplementation
in practice. It has been stated in the literature that a er having spent een years on
1 V. Ba t h, ‘ e Company Law and Foreign Investment Enterpri ses in the PRC-Para llel Systems of
Chinese-Foreig n Regulation’, 30 U.N.S.W.L.J. 3 (2007), 774.
2 See for the bene ts and reasons for c omparative research i nto Chinese and Engl ish law further: K .T.W.
Ong & C. R. Bax ter, ‘A comparative study of the f undamental ele ments of Chinese a nd English compa ny
law’, 48 Int`l & Comp. L.Q. (1999), 88 onwards.
3 K.T.W. Ong & C. R. Baxter, ‘A comparative st udy of the fundamenta l elements of Chinese and En glish
company law’, Int`l & Comp. L.Q. (1999), 8 8 with re ference t o Masaji C hiba (ed .), Asian Indigenous L aw
in Interaction with Pe rceived Law (London, 1986); C. Hawes Interpreting th e PRC Company Law through
the Lens of Chine se Political and Corpora te Culture, 13 U.N.S.W.L.J. 2 (2007), 813–823.
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