Corporate Governance in China: A Study of the Interdependent Model

The article aims to develop a theoretical framework of interdependent model based on stated-owned enterprises and private enterprises. There are three steps of interdependence, that is subordination (before 1978), relaxation (from 1978 to 1992), and multiform interdependent (since 1993). During the progress of corporate governance, state-owned enterprises (SOEs) transfer from “danwei” (work unit society) to “enterprise”, however, private enterprises changes from “grass-root organization for making a living” to “enterprise”. In general, different enterprises gain different support from different government levels and different government levels rely on different types of enterprises to achieve their goals. SOEs internal management is concentrated within a single person who may have several titles. In private enterprise, power is often concentrated within a single owner. Private enterprise development necessarily depends upon this owner’s social network. Key words: Interdependent model; State-Owned enterprises; Private enterprises