Young China Watchers' Dialogue, Hong Kong


On January 9, 2017, Jamie Allen, Secretary General, and Nana Li, Project Manager, ACGA presented The New Wave of China Corporate Governance—Old Wine In A New Bottle at a dialogue organised by the Young China Watchers' Hong Kong chapter. A summary is presented below.

Since 2001, the year the Corporate Governance Code was first issued in China, both the Chinese market and the pan-Asia Pacific region have undergone rapid changes over the past 17 years. Particularly after the Global Financial Crisis in 2008, the interaction between China’s markets and the outside world has reached a new level. However, following the recent decision by MSCI to include A-share firms in its Emerging Markets Index starting from May 2018, several foreign institutional investors have expressed their concerns about the corporate governance practices of certain A-share companies. Concerns include the role of Party Committees in corporate decision making, the role of Supervisory Boards, lack of audit quality, and the ongoing use of Variable Interest Entity (VIE) structures.

The Asian Corporate Governance Association (ACGA) has been studying corporate governance of Chinese companies since the early 2000s, and has been an active advocate for improved standards. In June 2017, under the new wave of 'responsible investment' and 'ESG inclusions' promoted by Chinese regulators, ACGA has co-organised the 2017 China Responsible Investment Forum with the Asset Management Association of China (AMAC) and the China Association for Public Companies (CAPCO). ACGA is also planning to publish its report on corporate governance in China, the first report it has done specifically on China, in early 2018.