To establish better corporate governance and to standardize the operating process, the CSRC outlined certain rules and regulations. These rules and regulations are being referred as Code for Corporate Governance of Listed Companies (Ho et al., 2012). The code is planned to be applied and enforced on all of the listed companies to protect the rights and interests of investor. This code is also comprised of certain basic moral standards and behavior rules for the senior management members, managers, supervisors, and directors of listed companies. Thus, it is evident that the base of corporate governance structure within China is to be an ethical one in context of business activities. The government seems to be focused on good reputation rather than high revenue. However, the foreign corporate governance is more about earning profits and incorporating current market trends.
The combination of traditional Chinese and foreign corporate governance structure may lead the Chinese market towards success or failure, depending upon the commitment and interests of companies (Allen et al., 2010). The key aspects of Chinese corporate governance structure is in accordance with their cultural belief and values as the entrepreneurs seem to rely more on the team building processes rather than individualism. Thus, the refinement of corporate governance structure in support of foreign governance structure is about to change the overall business market within China.
China has always been one of the nations that celebrates and recognizes success and hard work within the business activities. To attain high level of success and development within the Chinese market, it is essential to comply with the concerned corporate governance structure so as to attain competitive advantage domestically and get to the top (Allen et al., 2010). The corporations or enterprises within the Chinese market place are not generally corrupt or incompetent and significantly achieve success with long term strategies. But the recent discussions and instability in economy show the bad corporate governance structure and its incompliance. These issues are essential to be addressed and worked upon to prevent a major economic crisis in the coming future. As stated earlier, the government seems to incline more towards the foreign corporate governance structure to address the poor performance of companies in recent days.