BLP

The Chinese business economy is deeply influenced by the social structure and the political system, as well as by the peculiar country’s history and set of values. The so called “socialism with Chinese characteristics” represents an unicum in the world. Some of the main dilemmas the legislators and the decision makers constantly face are the choices between market v. planned economy, decentralization v. (re)centralization, contractual party autonomy v. state control and imported rules v. self-produced laws. How State-Owned Enterprises (hereinafter SOEs) try to develop an efficient and successful business model is the answer to the above-mentioned apparent trade-offs. It is mainly based on the set of rules and principles China adopted to run business and influenced by the internationalization process. As stated in the 13th Five-Year Plan (2016-2020), one of the main goals in China is to embrace international best practices which fit the Chinese context. In China, there is a clear acknowledgment of multiple interests of stakeholders as the only way to improve the “overall value of the company”. The difficulty in attempting to reconcile the Chinese Socialistic principles and the market economy competitiveness is leading to an exciting period of reforms and enhancements.  The role of the party organization within the corporations (in particular SOEs), the purpose of the firms attempting to balance social goals with performance and how those companies move towards modernity increasing performance are often not clear to non-insiders and foreigners. In this paper, the analysis tries to underpin how the Chinese legal frame reforming process and business practice tries to reconcile such apparent inconsistencies.