Transparency has gained its due importance in the corporate governance of China under the requirements set by the WTO and the Chinese Securities Regulatory Commission (CSRC) as directed by WTO has made policies to regulate the disclosure of companies in order to encourage transparency of operations. Transparency isessential in the face of increasing competition. But the Chinese economy is new to the policies and since the size, quality of corporations is not outlined and neither is the control level to be exercised on them so these issues discourage transparency. Under the requirements of the WTO a number of changes to incorporate transparency as a vital factor in the corporate governance ofChinahave been outlined.
The role of the government has been changed from being a centrally planned economy to a market economy which has restricted the state owned enterprises as well.
The environment is more strict in supervision since the Supreme court has played a vital role in resolving civil compensation cases. The CSRC and the trade commission developed the rules of corporate governance for listed companies and this document has served as a guiding principle to many firms.
The big shareholders have to be restricted in order to prevent concentration of the profits of a company. Transparency and disclosure regulations have restricted the encroachment of company profits plus the board of directors are allowed to voice their opinions regarding the disclosure details.
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