SOAS Research Online

Abstract

A case study of Shanghai Petrochemical Company (SPC) is used to analyse how economic reforms in China have impacted on corporate governance and enterprise performance. Reforms have increased the level of competition and altered the corporate structure of large state enterprises such as SPC. The case examines how SPC’s management have responded to the opportunities and challenges created by the reform process. The case study indicates that despite changes in corporate structure, property rights remain unclear resulting in a weakened corporate governance structure. Enterprise management have responded in an innovative way to the challenges of a more competitive product markets. Improvements in governance and performance are largely a result of market-oriented reform. However weak property rights and a failure to integrate ownership and market reforms more effectively have lessened the ability of SPC’s management to fully exploit new business opportunities. The findings thus illustrate how a more integrated approach to enterprise reform is necessary for enterprises to benefit fully from the reform process.