‘Seize and Hold with Both Hands’: The Political Implications of Corporate and Securities Law Reforms Under Hu Jintao

‘Seize and Hold with Both Hands’: The Political Implications of Corporate and Securities Law Reforms Under Hu Jintao

Andrei Molchynsky McGill University

November 2012

In March 2013, the Fifth generation of Chinese leaders, headed by Xi Jinping and Li Keqiang, officially took over from the previous leadership headed by Hu Jintao and Wen Jiabao. One of the most important corporate legal reforms during the Hu-Wen administration were the amendments of the PRC Securities Law and Company Law. In this article, the author argues that the Securities Law and Company Law reforms and the continued restructuring of the state enterprises may be viewed as the government’s attempt to uphold the legitimacy of the one-Party rule. More specifically, it is argued that the government regulation of the securities market has been serving the financing needs of state-owned enterprises, while promoting the political needs of the Party. This paper also discusses the involvement of the Chinese Communist Party in corporate governance, demonstrating the Party’s presence in the operation and management of listed and, to a lesser extent, non-listed companies. Finally, the author will show how China’s program of corporate and securities reform tries to reconcile with the official ideology of the Communist Party.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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