Reciprocal Convergences: How China Might Influence Western Corporate Governance

Abstract

The literature on economic and corporate law convergence has largely been a conversation about the West. In particular, it focuses on the influence of Anglo-American (and principally American) norms and practices, primarily on those of Western European nations. As such, it is unidirectional in concept. It also works through a common paradigm: Although Western nations differ they all accept Enlightenment values, making such influence more palatable and more possible. The rise and possible dominance of Asian economies, principally China, suggests that we consider whether Eastern norms and practices not born of the Enlightenment might come to influence Western norms and practices and the channels through which this might happen. This is a possibility the literature has not yet addressed. The paper introduces a theory of reciprocal convergences to provide a framework for analysis. After surveying the convergence literature and describing reciprocal convergences, it introduces indigenous Chinese ideas about corporate social responsibility as the vehicle that might embody these values, analyzing the literature on what those ideas look like and how they differ from Western ideas. Finally, the paper looks at two possible channels through which these influences might be transmitted: the multinational enterprise and China’s One Belt, One Road initiative. It concludes with some tentative thoughts about future developments.