China has come a long way over the years and there is a significant difference was then and is now.China has undergone three major tranisitional phases in terms of economy, politics and society. China’s economy has gone through a drastic change from being a planned and centralized economy to a market economy. Politics in China have moved from being arbitrary in nature with people in power to a law abiding country. Society in China was closed and now is a more open society.
The World Trade Organization is viewed as another reform in the name of coporate governance whereas, strong legal guidelines are absent which makes it risky for businesses to operate in the Chinese market. WTO is particularly considered as a reform with regards to banks and state-owned enterprises that are dominant in the corporate governance inChina(Claessens, S., Djankov, S., and Lang, L; 1999).
China’s corporate governance gives state-owned enterprises more dominance, hence they play a major role in running the economy.China’s way forward to the WTO is based upon institutions that are law abiding and also market-based, hence the changes inChinawere inevitable and necessary. Such an environment inChinamakes it difficult for small firms to survive yet commercialization has taken a high flight in the country.China’s move towards a market based economy and commercialization has invited intense competition from the west.China’s economy has posed strong competition to U.S and also other countries. Yet providing business licenses on the basis of political consideration is inappropriate and deteriorating for the economy of China.
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