Euro-Chinese Company Models: An Exploratory Journey into the Position of Directors, Shareholders and Stakeholders in Chinese and European Company Law

Abstract

This 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. The revision of the Chinese Company Law entails a growing importance of its provisions for foreign investors. Article 218 of the new Company Law extends the applicability of the Law to foreign-invested companies. Despite its similarities with other jurisdictions, 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 influence the perception of companies in Chinese society. It goes without saying that these rudiments of Chinese Company Law affect the corporate goal which in its turn has an influence on the internal structure, management and external relations of the company. This paper examines the applicable company model in China and compares it to the existing company models in Europe. It focuses on the influence of these (company) models on the position of directors, shareholders and stakeholders.