Policies and institutions
The policies and institutions in China are extremely rigid. Overall the corporate governance in China can hinder with the growth of small companies.
Corporate Governance Practises on the firm level in China
China’s corporate governance presents a dismal picture and and the controlling shareholders often benefit at the expense of small shareholders. Corporate governance comprises a set of mechanisms andChinahas corporate governace mechanisms employed as well.
Corporate Governance Mechanisms
There are two types that define corporate governance mechanisms in China which include internal mechanisms (ownership structure, board of directors, financial disclosure etc) and external mechanisms (competition, take overs, legal infrsturcture etc) (Ning, Xiangdong, Xianming Zhou, 2005).
This research aims to study the role of corporate governance in the expansion of an automotive retailer intoChina. The research shall explain the scope of such an expansion in the face of tightening corporate governance inChina. Since our focus is a company fromUKexpanding intoChinathe research will compare the corporate governance codes ofChinawithUK.
The research study is a detailed analysis of the corporate governance code in UKand in China. The comparison is based on a company established in UK which wants to expand into Chinagiven the low cost and a good potential market, a lot of companies deem China to be a good environment for business. The paper compared the corporate governance code in China with that of UK and since UKimposes competitive pressures on automotive retailers, China has the benefits of low cost yet the corporate governance in Chinadoes not benefit minority shareholders in the industry and this might create issues in the future.
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