The China Venture
The China Venture The China Venture
ACKNOWLEDGEMENTS I wish to thank the Grundlagenforschungsfonds (GFF) of the University of St. Gallen for supporting the employment of assistants, Peter Lindstrom, Anita Subramanian and Matthias Weibel, to work on the project. I also wish to thank the many student-authors who have contributed to the work of these three books, in terms of their articles, revisions and updates and other editorial and secretarial assistance. In particular, I would like to thank Oliver Kabuth, Klaus Kukovetz, Matthias Weibel, Michael Loretan, Cinderella von Dungern, Rainer Kirchhofer, Stephan Lechner, Matthias Kästner, Brigitta Joho and Jürgen Müller, for their contributions to the China Venture book; Peter Lindstrom, the students of the Vietnam study group (Marc Ammann, Verena Antl, Andreas Barfuss, Andrea Baumeister, Christian Chalut, Fabian Engl, Thomas Glesti, Urs Graf, Thomas Gysi, Benjamin Jäggi, Brigitta Joho, Monica Kirchhoff, Chantal Landert, Florian Lanz, Robert Liebl, Jürgen Müller, Oliver Schwarz, Pascal Sommerhalder, Joel Widmer and Antonia Zambon, including my assistants Reza Rahimi, Klaus Kukovetz and Peter Lindstrom), Stefan Otto, Reza Rahami, Tina Habicht, Philipp Reese, Marco Sütterle, Peter Geiser, Matthias Kästner, and Christian Carduck, for their contributions to the Emerging Asia book, and Anita Subramanian, Peter Lindstrom, Marusa Fasano, Christian Börstnar, Marc Oesch, Andreas Barfuss, Sven Graber, Stefan Graf, Gabriel le Laidier Robert Liebl, and Daniel Seeli, for their contributions to the Asia Businesses in Europe book. Finally, I wish to thank my secretary, Kristina Stalder and my personal assistants, Mirweiss Meidanval and Ricarda Ross for their often unseen and unacknowledged help in my work place. Li Choy Chong ii
Table of Contents List of Figures ..........................................................................................................................viii List of Tables .............................................................................................................................ix Abbreviations ..............................................................................................................................x 1. INTRODUCTION: THE CH INA VENTURE ............................................................ 1 2. THE CHINESE BUSINESS ENVIRONMENT .......................................................... 4 2.1 THE CHINA REFORM STORY (BY MATTHIAS WEIBEL) ...................................................4 2.2 THE LEGAL SYSTEM IN CHINA (BY DR. MICHAEL LORETAN )........................................6 2.2.1 Chinese Legal History..............................................................................................7 2.2.1.1 Traditional Chinese Law ..................................................................................7 2.2.1.2 Modern Chinese Law .......................................................................................8 2.2.2 Governmental structure..........................................................................................10 2.2.3 Legal structure ........................................................................................................11 2.2.4 Judicial Structure ....................................................................................................12 2.2.5 Current problems of the operating legal system ....................................................14 2.2.6 Foreign Investment Law ........................................................................................15 2.2.7 Contract law ...........................................................................................................16 2.2.8 Company Law ........................................................................................................17 2.2.9 Conclusion .............................................................................................................18 2.3 BUSINESS FINANCE IN CHINA (BY CINDERELLA FREIIN VON DUNGERN) .....................19 2.3.1 Financial framework for foreign direct investments..............................................20 2.3.1.1 Financial sector development in China ..........................................................21 2.3.1.2 Financial institutions ......................................................................................23 2.3.1.3 Legal framework for financial structuring .....................................................30 2.3.1.4 Instruments of financial control in China .......................................................32 2.3.2 China’s financial markets.......................................................................................35 iii
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ACKNOWLEDGEMENTS<br />
I wish to thank the Grundlagenforschungsfonds (GFF) of the University of St. Gallen for<br />
supporting the employment of assistants, Peter Lindstrom, Anita Subramanian and Matthias<br />
Weibel, to work on the project.<br />
I also wish to thank the many student-authors who have contributed to the work of these<br />
three books, in terms of their articles, revisions and updates and other editorial and secretarial<br />
assistance. In particular, I would like to thank Oliver Kabuth, Klaus Kukovetz, Matthias<br />
Weibel, Michael Loretan, Cinderella von Dungern, Rainer Kirchhofer, Stephan Lechner,<br />
Matthias Kästner, Brigitta Joho and Jürgen Müller, for their contributions to the <strong>China</strong><br />
<strong>Venture</strong> book;<br />
Peter Lindstrom, the students of the Vietnam study group (Marc Ammann, Verena Antl,<br />
Andreas Barfuss, Andrea Baumeister, Christian Chalut, Fabian Engl, Thomas Glesti, Urs<br />
Graf, Thomas Gysi, Benjamin Jäggi, Brigitta Joho, Monica Kirchhoff, Chantal Landert,<br />
Florian Lanz, Robert Liebl, Jürgen Müller, Oliver Schwarz, Pascal Sommerhalder, Joel<br />
Widmer and Antonia Zambon, including my assistants Reza Rahimi, Klaus Kukovetz and<br />
Peter Lindstrom), Stefan Otto, Reza Rahami, Tina Habicht, Philipp Reese, Marco Sütterle,<br />
Peter Geiser, Matthias Kästner, and Christian Carduck, for their contributions to the Emerging<br />
Asia book, and<br />
Anita Subramanian, Peter Lindstrom, Marusa Fasano, Christian Börstnar, Marc Oesch,<br />
Andreas Barfuss, Sven Graber, Stefan Graf, Gabriel le Laidier Robert Liebl, and Daniel<br />
Seeli, for their contributions to the Asia Businesses in Europe book.<br />
Finally, I wish to thank my secretary, Kristina Stalder and my personal assistants, Mirweiss<br />
Meidanval and Ricarda Ross for their often unseen and unacknowledged help in my work<br />
place.<br />
Li Choy Chong<br />
ii
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