A July 6 South China Morning Post article reports that China's Xugong Construction Machinery is considering suing rival Sany Corp for disrupting its buyout deal with the U.S. Carlyle Group. An IFC colleague in Beijing sent us the clipping (article still not posted), noting the key aspects of the news report.
On the one hand, the threat of legal action indicates a thriving Chinese private sector. Even more salient to our colleague is the reference made by a Xugong official regarding corporate governance issues. IFC keeps a close watch on the development of corporate governance standards in private firms throughout the emerging markets, offering advisory services where needed. Talk of corporate governance is a vital step forward in the evolution of China's firms. Action on corporate governance is the next step in tehir ability to compete globally.
I agree with you. Corporate transparency is holding back countless numbers of Chinese companies and it is causing bad loans and reducing foreign equity investment.
Posted by: China Law Blog | July 29, 2006 at 06:15 PM