Chapter 1: Overview of the company law regime in China
The development of company law in China is increasingly catching the eye of international investors, practitioners, and academics and government officials who are China observers. The study of Chinese company law is moving towards the forefront of international scrutiny for a number of reasons. First, companies (or 'corporations')are the dominant players in China's rapidly growing economy. Business entities with the nature of modern companies did not exist in China during the first few decades of the Peoples' Republic ('PRC'), as it then practiced a planned economy in which all economic entities were run directly either by the state or collectives. However, after years of economic reform, the company limited by shares is now the dominant form of business organization. According to official statistics, by the first half of 2005, there were about 1.2 million enterprises in the People's Republic of China ('China' or the 'PRC') registered in the form of companies legally established under the national Company Law. Companies are overwhelmingly predominant in China's major economic sectors. The enterprise companies, themselves a result of an economic revolution that is ongoing in China, are making the most significant contribution to the dynamism of the Chinese economy. It is not exaggerated to say that the fate of enterprise reform will determine the future of the Chinese economy, namely whether China will successfully complete its transformation from a planned to a market-based economy, and in this process, improve the long-term competitiveness of its industries.