Twenty-Five Years On — The Establishment and Application of Corporate Fiduciary Duties in PRC Law

This chapter analyzes the development of corporate fiduciary law and principles in the law of the People’s Republic of China from the early 1990s to date. The story starts with a short history of the contested advent of explicitly law-based corporate fiduciary duties into the PRC legal system after 1978, with an in depth consideration of the concurrent “legal construction” and “corporatization without privatization” programs implemented by China’s post-Mao administrations in the two decades following. In that regard, at least three development paths are described and explained — academic, regulatory and judicial/jurisprudential. Then the paper details how the substantive legal concepts associated with corporate (and later partnership) fiduciary duties have been injected into Chinese law and regulation, by which institutions, and with what legal, regulatory or economic policy aims and effects. Third, the article canvases how these substantive legal principles have gained life, or not, in application by state institutions like the PRC judiciary or its securities regulator, or, oftentimes more importantly, at the urging of private claimants. Finally, the chapter provides a consideration of what this particular development path, both its advances and frustrations, means for the assumption by China — and application by increasingly competent and autonomous, if not politically fully independent, institutions embedded in a vastly different tradition — of complex legal doctrines originating in distinct legal, political and economic systems. The ostensibly narrow story of corporate fiduciary duties in modern China thus has significant meaning for the ongoing and future development of the PRC’s entire governance and legal systems. A revised version of this work will be published as a chapter in the forthcoming collection: Evan Criddle, Paul B. Miller and Robert H. Sitkoff, eds., The Oxford Handbook of Fiduciary Law (New York: Oxford University Press, 2018)