The History of Corporate Ownership in China: State Patronage, Company Legislation, and the Issue of Control

Abstract

This paper examines the emergence of corporate ownership in China from the final decades of the Qing empire in the late 19 th century to the early Republican period in the 1910s and 1920s. By analyzing the actual process of incorporation, the development of the legal and financial environment, in particular the role of the state, we ask whether the “top-down ” approach, in which the central government established a legal framework for corporate enterprise based on Western models and the assumption that it would work as it did for Western firms and markets, was a viable approach to the modernization of a financial system traditionally dominated by family businesses and economic state patronage. Using business records from turn-of-the-century Chinese corporate companies, this paper argues that the government’s “top-down ” approach, while clearly well-intentioned, created a framework which only insufficiently promoted the system of corporate capitalism in pre-war China. We would like to thank the National Bureau of Economic Research and the organizer of the project and editor of this volume, Randall Morck. We benefited from discussions with all the participants of the three

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