Transparency and Opaqueness in the Chinese ICT Sector: A Critique of Chinese and International Corporate Governance Norms

This paper critiques the current Chinese corporate governance framework and the OECD Corporate Governance Principles on which the Chinese framework is largely based through detailed analysis of public disclosures by four prominent Chinese internet and communications technology (ICT) firms. These include State-controlled firms (China Telecom & China Mobile), mixed ownership (ZTE), and privately-controlled firms (Huawei Technologies). The paper argues that neither Chinese nor international corporate governance norms deal adequately with the complex group structures that are so common among large Chinese firms. It also reveals deficiencies in the rules on independent directors, supervisory committees, and Chinese Communist Party committees as they are applied by Chinese ICT firms. The paper concludes with reform proposals that would provide more useful information and better protection to outside investors and public stakeholders in the unique Chinese corporate environment.