LW6134 Chinese and Comparative Company Law

Unit 9

State-Owned and Foreign-Invested Companies

Study special governance problems in state-invested companies and foreign-invested enterprises under the revised Company Law and investment regime.

Before seminar

Prepare Unit 9: State-Owned and Foreign-Invested Companies

Work through these public materials before class. The sequence keeps source reading before problem analysis and does not include model answers.

22 linked materials
Core law
11
Cases
1
Readings
9
Exercise
1
  1. Core law

    Read core legislation and rules

    Start with the statutory, regulatory, and judicial materials that frame this unit.

  2. Cases

    Review linked cases

    Identify the facts, holding, and remedial move before turning to commentary.

  3. Readings

    Compare readings

    Use scholarship, practice notes, and comparative materials to test the Chinese-law position.

  4. Exercise

    Attempt the public exercise

    Apply the sources to a problem before looking at seminar discussion prompts.

Reflection prompts

  • Which rule or case controls the hardest issue in Unit 9?
  • Where would a Hong Kong, Delaware, UK, Singapore, or transnational comparator change the analysis?
  • What extra facts would you need before advising a director, shareholder, creditor, or regulator?

Introduction

This unit asks how company law changes when ownership is politically or internationally charged. Students compare state-invested companies, restructured enterprises, foreign-invested enterprises, and companies with cross-border capital plans.

  • State investor functions and state-owned asset supervision.
  • Governance of state-invested companies under the revised Company Law.
  • Foreign-invested company organization after the Foreign Investment Law.
  • National treatment, negative lists, information reporting, and security review.

Hypotheticals

  • A state-owned parent instructs a subsidiary board to sell assets below market to another state affiliate.
  • A foreign investor acquires shares in a domestic company in a restricted sector.
  • Employee-shareholders in a restructured enterprise challenge a charter repurchase clause.

Legislation

Use the Company Law’s state-invested company provisions with the State-Owned Assets Law, SASAC/state-owned asset supervision rules, and state-asset transaction measures. For foreign-invested companies, use the Foreign Investment Law, its implementing regulation, information reporting measures, current negative list, security-review measures, and overseas listing rules.

Cases

Guiding Case No. 96 shows how restructuring history, employee status, and articles can shape shareholder identity and exit.

Readings

Hines and the OECD listed-company report help students connect ownership identity to governance practice. Add the OECD SOE guidelines, the China governance country note, Milhaupt and Zheng on state capitalism, and the official foreign-investment Q&As to separate formal ownership, state influence, and investment-control rules.

Unit materials

Legislation

law Mainland China English version

Company Law of the People's Republic of China (2023 Revision)

中华人民共和国公司法

The core statute for Chinese companies, covering legal personality, registration, capital, corporate organs, directors' duties, state-invested companies, bonds, accounting, restructuring, dissolution, liquidation, and liability.

Authority
National People's Congress
Citation
Revised 29 December 2023; effective 1 July 2024
Date
2024-07-01
Source English version
law Mainland China Official translation

Law on State-Owned Assets in Enterprises

中华人民共和国企业国有资产法

A statute on state investor functions, state-owned asset transfer, supervision, enterprise restructuring, and duties of personnel involved in state-invested enterprises.

Authority
National People's Congress
Citation
Adopted 28 October 2008; effective 1 May 2009
Date
2009-05-01
Source
rule Mainland China Translation unavailable

Measures for the Supervision and Administration of Enterprise State-Owned Assets Transactions

企业国有资产交易监督管理办法

Rules governing transfers of enterprise state-owned equity, capital increases, and major asset transfers, including public exchange requirements, approval authority, information disclosure, and supervision.

Authority
State-Owned Assets Supervision and Administration Commission and Ministry of Finance
Citation
SASAC and MOF Order No. 32; effective 24 June 2016
Date
2016-06-24
Source
rule Mainland China Translation unavailable

Provisions on Democratic Management of Enterprises

企业民主管理规定

Rules on employee congresses, employee participation, democratic management, factory-affairs disclosure, and employee representative mechanisms across enterprise forms.

Authority
ACFTU, SASAC, Ministry of Supervision, ACFIC, and related authorities
Citation
Zong Gong Fa [2012] No. 12
Date
2012-02-13
Source
law Mainland China Official translation

Foreign Investment Law of the People's Republic of China

中华人民共和国外商投资法

The framework statute for foreign investment access, promotion, protection, information reporting, national treatment, negative lists, and foreign-invested enterprise governance.

Authority
National People's Congress
Citation
Adopted 15 March 2019; effective 1 January 2020
Date
2020-01-01
Source
regulation Mainland China Translation unavailable

Regulation for Implementing the Foreign Investment Law

中华人民共和国外商投资法实施条例

State Council implementing regulation for foreign-investment promotion, protection, management, negative-list administration, information reporting, policy transparency, and transitional issues.

Authority
State Council
Citation
State Council Order No. 723; effective 1 January 2020
Date
2020-01-01
Source
rule Mainland China Translation unavailable

Measures for Foreign Investment Information Reporting

外商投资信息报告办法

Rules requiring foreign investors and foreign-invested enterprises to submit initial, change, deregistration, and annual investment information through the registration and enterprise-credit systems.

Authority
Ministry of Commerce and State Administration for Market Regulation
Citation
MOFCOM and SAMR Order No. 2 of 2019; effective 1 January 2020
Date
2020-01-01
Source
rule Mainland China Translation unavailable

Special Administrative Measures for Foreign Investment Access (Negative List) 2024

外商投资准入特别管理措施（负面清单）（2024年版）

The current national negative list for foreign-investment access, identifying prohibited and restricted sectors and confirming national-treatment management outside listed restrictions.

Authority
National Development and Reform Commission and Ministry of Commerce
Citation
NDRC and MOFCOM Order No. 23 of 2024; effective 1 November 2024
Date
2024-11-01
Source
rule Mainland China Translation unavailable

Measures for Security Review of Foreign Investment

外商投资安全审查办法

Rules for national-security review of foreign investments in military, important agriculture, energy, infrastructure, transport, cultural products, information technology, internet products, financial services, and key technologies.

Authority
National Development and Reform Commission and Ministry of Commerce
Citation
NDRC and MOFCOM Order No. 37 of 2020; effective 18 January 2021
Date
2021-01-18
Source
rule Mainland China Official translation

Trial Measures for Overseas Securities Offering and Listing by Domestic Companies

境内企业境外发行证券和上市管理试行办法

The filing-based regime for direct and indirect overseas listings by PRC domestic companies, including red-chip structures and post-listing filing obligations.

Authority
China Securities Regulatory Commission
Citation
CSRC rules released 17 February 2023; effective 31 March 2023
Date
2023-03-31
Source

Unit materials

Cases

case Mainland China Translation unavailable

Guiding Case No. 96: Song Wenjun v. Xi'an Dahua Catering Co.

指导案例96号：宋文军诉西安市大华餐饮有限公司股东资格确认纠纷案

A shareholder-status case on charter-based transfer restrictions and agreed repurchase arrangements in a restructured state-owned enterprise.

Authority
Supreme People's Court
Citation
Supreme People's Court Guiding Case No. 96
Date
2018-06-20
Source

Unit materials

Readings

literature Mainland China English original

Corporate Governance of Listed Companies in China

A background report on Chinese listed-company governance, useful for institutional context even though later reforms must be checked separately.

Authority
OECD
Citation
OECD-China Policy Dialogue, 2011
Date
2011-09-01
Source
literature Mainland China English original

OECD Corporate Governance Factbook 2025: China Country Note

Country note summarizing China's corporate governance framework, recent reforms, shareholder rights, board rules, public equity ownership, sustainability reporting, and regulatory architecture.

Authority
OECD
Citation
OECD Corporate Governance Factbook 2025
Date
2025-10-30
Source
practice note Mainland China English original

The New Company Law: Restructuring Corporate Governance

Practice overview of how the revised Company Law restructures corporate governance, including legal representatives, board design, audit committees, and state-funded companies.

Authority
King & Wood Mallesons
Citation
King & Wood Mallesons, 30 December 2023
Date
2023-12-30
Source
literature Mainland China English version

Beyond Ownership: State Capitalism and the Chinese Firm

Influential account of Chinese state capitalism that looks beyond formal ownership to personnel, party-state influence, finance, regulation, and networks.

Authority
Curtis J. Milhaupt and Wentong Zheng
Citation
Curtis J. Milhaupt and Wentong Zheng, Georgetown Law Journal, 2015
Date
2015-03-22
Source English version
practice note Mainland China Translation unavailable

NDRC Q&A on the 2024 Foreign Investment Access Negative List

国家发展改革委有关负责同志就《外商投资准入特别管理措施（负面清单）（2024年版）》答记者问

Official explanation of the 2024 foreign-investment negative list, including the policy background, reduction from 31 to 29 measures, and removal of manufacturing restrictions.

Authority
National Development and Reform Commission
Citation
NDRC, 2024
Date
2024-09-08
Source
practice note Mainland China Translation unavailable

MOFCOM and SAMR Q&A on Foreign Investment Information Reporting

商务部、市场监管总局有关司局负责人就《外商投资信息报告办法》有关问题答记者问

Official explanation of the foreign-investment information reporting system, including reporting channels, integration with market registration, annual reporting, and supervision.

Authority
Ministry of Commerce and State Administration for Market Regulation
Citation
MOFCOM, 2020
Date
2020-01-02
Source