Boosting growth through strengthening investor and creditor protection in China: How China can learn from the UK experience
Lead Research Organisation:
University of Leeds
Department Name: Law
Abstract
This application demonstrates that the quality of legal institutions can matter for economic development and that important policy lessons can be learned by China from the UK in this regard. This application recognises that China has been a remarkable economic success story but the country also faces new challenges as its economy enters a more mature phase. In particular, it needs to avoid the 'middle income trap' i.e. where a country has costs that are now too high to compete with low-income countries but where productivity does not match those in high-income countries.
There are economies in Asia including Singapore and Hong Kong SAR that have emerged successfully from middle income status. Both these economies are built on UK law and are renowned for the quality of their legal infrastructure in supporting development of the financial system. The application suggests how China might also benefit from the UK experience in building its legal infrastructure. But the application recognises China's singular journey and avoids simplistic conclusions that certain consequences will inevitably follow form certain formal changes. It recognises the need for a continuous process of adaptation and development; learning appropriately from experience and responding sensitively to local conditions. The application demonstrates in particular how legal reforms can support economic growth through
- enhancing the protections available to minority investors
- supporting the availability of credit and contributing to lower-cost credit
- supporting the restructuring of ailing businesses.
In these areas we seek to provide options for enhancing and reforming the legal and financial system in China that are based upon the UK and other experience. We acknowledge that there are choices to be made between means and ends and that the relationship between means and ends is contingent and uncertain.
The data we rely on will come principally from the World Bank Doing Business (DB) reports and rankings which are grounded on the notion that smarter business regulation promotes economic growth.
The DB rankings have been issued annually since 2004 and the 2016 rankings includes 11 sets of indicators for 189 economies. Each economy is ranked on the individual indicators and also in an overall table. Currently, the UK is 6th in this table and China 84th but Singapore is 1st and Hong SAR is 5th which shows that it is possible for Asian economies to rank highly.
In our project, we will explore deep into the detail underlying the Protecting Minority Investors, Getting credit and Resolving Insolvency indicators. These 3 indicators appear particularly pertinent to the development of a mature financial system and in relation to them all China ranks far below the UK. On protecting investors, China is ranked as 134th whereas the UK is 4th. We show how the gap can be bridged and how China can learn from the UK experience by examining critically how the UK has protected minority investors and ascertaining what measures of protection might work most effectively in Chinese conditions.
Our approach takes the relevant DB rankings as a guide but subjects them to critical scrutiny and engaging systematically with the methodology underpinning the rankings; addressing the robustness of this methodology and considering alternative approaches. For instance, we will test the robustness and limitations of the DB 'resolving insolvency' data on China using Jiande Municipal People's Court in Zhejiang Province as a case study. This makes the process of data collection and analysis more manageable. 20 interviews with creditors and practitioners will be undertaken in Zhejiang Province and data on business closures from the local branches of the China Business Registration Authorities and the China Pension Management Authorities will also be collected.
We will also use econometric analyses based on detailed micro data from other data sources
There are economies in Asia including Singapore and Hong Kong SAR that have emerged successfully from middle income status. Both these economies are built on UK law and are renowned for the quality of their legal infrastructure in supporting development of the financial system. The application suggests how China might also benefit from the UK experience in building its legal infrastructure. But the application recognises China's singular journey and avoids simplistic conclusions that certain consequences will inevitably follow form certain formal changes. It recognises the need for a continuous process of adaptation and development; learning appropriately from experience and responding sensitively to local conditions. The application demonstrates in particular how legal reforms can support economic growth through
- enhancing the protections available to minority investors
- supporting the availability of credit and contributing to lower-cost credit
- supporting the restructuring of ailing businesses.
In these areas we seek to provide options for enhancing and reforming the legal and financial system in China that are based upon the UK and other experience. We acknowledge that there are choices to be made between means and ends and that the relationship between means and ends is contingent and uncertain.
The data we rely on will come principally from the World Bank Doing Business (DB) reports and rankings which are grounded on the notion that smarter business regulation promotes economic growth.
The DB rankings have been issued annually since 2004 and the 2016 rankings includes 11 sets of indicators for 189 economies. Each economy is ranked on the individual indicators and also in an overall table. Currently, the UK is 6th in this table and China 84th but Singapore is 1st and Hong SAR is 5th which shows that it is possible for Asian economies to rank highly.
In our project, we will explore deep into the detail underlying the Protecting Minority Investors, Getting credit and Resolving Insolvency indicators. These 3 indicators appear particularly pertinent to the development of a mature financial system and in relation to them all China ranks far below the UK. On protecting investors, China is ranked as 134th whereas the UK is 4th. We show how the gap can be bridged and how China can learn from the UK experience by examining critically how the UK has protected minority investors and ascertaining what measures of protection might work most effectively in Chinese conditions.
Our approach takes the relevant DB rankings as a guide but subjects them to critical scrutiny and engaging systematically with the methodology underpinning the rankings; addressing the robustness of this methodology and considering alternative approaches. For instance, we will test the robustness and limitations of the DB 'resolving insolvency' data on China using Jiande Municipal People's Court in Zhejiang Province as a case study. This makes the process of data collection and analysis more manageable. 20 interviews with creditors and practitioners will be undertaken in Zhejiang Province and data on business closures from the local branches of the China Business Registration Authorities and the China Pension Management Authorities will also be collected.
We will also use econometric analyses based on detailed micro data from other data sources
Planned Impact
The project aims to influence policy-makers, and guide investors, companies and practitioners on the legal reforms necessary to provide China with a more competitive financial and legal system with increased opportunities for all. it will highlight in particular the reforms that are needed in respect of enhancing the protections available to minority investors; supporting the availability of credit including lower-cost credit; and facilitating the restructuring of ailing businesses. It also aims to influence the World Bank in reviewing its Doing Business data. The project will do this by leveraging the combined and complementary disciplinary and cross country strengths of the Centre for Business Law and Practice (CBLP) at the School of Law, University of Leeds and the Management department at the University of Wuhan. It will utilise their different networks and bring these together to promote the development of innovative new policy ideas and to facilitate policy formation. We set out below these specific policy impacts
1. Policy-Makers/Regulators/Government
A strong Chinese financial and legal system is essential not only for a strong Chinese economy but also, given the size of China's economy, for a sound global economy. Weaknesses in the system can erode trust, discourage investment, including inward investment into China. Chinese investment into the UK may also be impacted if weaknesses in the financial and legal system impact on the Chinese economy. By examining whether there are measures that may enhance the protections available to minority investors, support the availability of credit and lower-cost credit and support the restructuring of ailing businesses, the project will assist Chinese policy-makers in designing measures that may address these objectives. It also aims to assist Hong Kong and international regulators in better understanding and assessing the risks and benefits posed by Chinese companies for investors.
2. The World Bank
The study includes a visit to the World Bank and will assist it in assessing the reliability of its Doing Business data in relation to China and where necessary adjusting this information. This will in turn assist those who rely on such data for investment and policy decisions.
3. Investors-Shareholders and Creditors
The project will assist investors both outside and within China, such as the China Investment Corporation who are seeking to make investment decisions in Chinese companies, by providing them with a more detailed understanding of the risks involved and the protections available and any reforms they may wish to press for.
4. Companies
The project will benefit Chinese companies seeking to attract investment by providing them with data on the perceived weaknesses, if any, of the Chinese financial and legal system and provide data on what private measures that they be able to take to address these and attract investment.
5. Professional and Practitioner Groups
The project will inform the practice of practitioners regarding the likely outcomes of litigating on behalf of minority shareholders and creditors and what reforms may be required. This may result in strengthening of protection for investors insofar as it facilitates more successful or effective litigation.
The above groups will be reached in the following ways:
Groups 1 and 2: Targeted briefing papers, invitation to participate at conferences, workshops, visits to key policy-makers to present research. Their feedback will be sought on design of project as it progresses and they will be briefed on progress. The Final report will be directly disseminated to them.
Groups 3-5: Invitation to conferences, workshops at which social media communications will be flagged up, dissemination through the partner networks. Their feedback and views will be sought eg through comments on blogs, email and in person.
Advisory Board and policy makers will be contacted regularly for feedback on project findings.
1. Policy-Makers/Regulators/Government
A strong Chinese financial and legal system is essential not only for a strong Chinese economy but also, given the size of China's economy, for a sound global economy. Weaknesses in the system can erode trust, discourage investment, including inward investment into China. Chinese investment into the UK may also be impacted if weaknesses in the financial and legal system impact on the Chinese economy. By examining whether there are measures that may enhance the protections available to minority investors, support the availability of credit and lower-cost credit and support the restructuring of ailing businesses, the project will assist Chinese policy-makers in designing measures that may address these objectives. It also aims to assist Hong Kong and international regulators in better understanding and assessing the risks and benefits posed by Chinese companies for investors.
2. The World Bank
The study includes a visit to the World Bank and will assist it in assessing the reliability of its Doing Business data in relation to China and where necessary adjusting this information. This will in turn assist those who rely on such data for investment and policy decisions.
3. Investors-Shareholders and Creditors
The project will assist investors both outside and within China, such as the China Investment Corporation who are seeking to make investment decisions in Chinese companies, by providing them with a more detailed understanding of the risks involved and the protections available and any reforms they may wish to press for.
4. Companies
The project will benefit Chinese companies seeking to attract investment by providing them with data on the perceived weaknesses, if any, of the Chinese financial and legal system and provide data on what private measures that they be able to take to address these and attract investment.
5. Professional and Practitioner Groups
The project will inform the practice of practitioners regarding the likely outcomes of litigating on behalf of minority shareholders and creditors and what reforms may be required. This may result in strengthening of protection for investors insofar as it facilitates more successful or effective litigation.
The above groups will be reached in the following ways:
Groups 1 and 2: Targeted briefing papers, invitation to participate at conferences, workshops, visits to key policy-makers to present research. Their feedback will be sought on design of project as it progresses and they will be briefed on progress. The Final report will be directly disseminated to them.
Groups 3-5: Invitation to conferences, workshops at which social media communications will be flagged up, dissemination through the partner networks. Their feedback and views will be sought eg through comments on blogs, email and in person.
Advisory Board and policy makers will be contacted regularly for feedback on project findings.
Publications
Zhao, J.
(2018)
The Eligibility of Claimants to Commence Derivative Litigation on Behalf of China's Joint Stock Limited Companies
in Hong Kong Law Journal
McCormack, G.
(2018)
Criticising the Quest for Global Insolvency Standards
in KLRI Journal of Law and Legislation
Keay Andrew
(2018)
Transforming Corporate Governance in Chinese Corporations: A Journey, Not a Destination
in NORTHWESTERN JOURNAL OF INTERNATIONAL LAW & BUSINESS
McCormack G
(2018)
Why 'Doing Business' with the World Bank May Be Bad for You
in European Business Organization Law Review
Zhang, Z
(2018)
Corporate Reorganizations in China - an Empirical Analysis
Zhang Z
(2019)
The Corporate Bankruptcy Substitute in China
in Columbia Journal of Asian Law
Zhang Z
(2020)
Resolving Corporate Insolvencies in China: the Gap between Law and Reality" Miami International & Comparative Law Review
in Miami International & Comparative Law Review
Zhao, J.; Jiemei Ou; Yan Liu; Wangwei Liu
(2020)
Make or Buy - A New Look for Derivative Action Costs in Chinese Law for a More Enabling Environment
in Texas International Law Journal
Keay A
(2020)
Protecting Chinese Investors Through Oppression Actions: An Examination in Light of the Position in the United Kingdom
in Australian Journal of Asian Law
Wei, C
(2020)
Chinese Characteristics and Universalist Insolvency Ideals
in Hong Kong Law Journal
| Description | This research aims to show, on the basis of the UK experience, World Bank data and other international benchmarks, how a sound financial system fosters economic growth and what part legal institutions can play in facilitating a sound financial system. It addresses in particular how growth can be sustained through legal reforms that will: • enhance the protections available to minority investors • support the availability of credit and contributing to lower-cost credit • support the restructuring of ailing businesses. The research is likely to be of great relevance to practitioners and policy makers working in the field. It should also be of great benefit to academics in the fields of law and regulation, law and development, capital market studies and business and finance more generally as well as to China specialists. The World Bank 'Doing Business' report has produced rankings which are grounded on the notion that smarter business regulation promotes economic growth. The DB rankings have been issued annually since 2004 and the 2016 rankings includes 11 sets of indicators for 189 economies. Each economy is ranked on the individual indicators and also in an overall table. • The UK is ranked 6th and China 84th in the 'Doing Business' report • Singapore is 1st and Hong SAR is 5th; these Asian economies have built on UK law and are renowned for the quality of their legal infrastructure in supporting development of the financial system • China might also benefit from the UK experience in building its legal infrastructure. The data we rely on will come principally from the World Bank Doing Business (DB) reports and rankings. We will focus on 3 indicators that are particularly pertinent to the development of a mature financial system and in relation to them all China ranks far below the UK • Protecting Minority Investors • Getting credit • Resolving Insolvency Our approach takes the relevant DB rankings as a guide but subjects them to critical scrutiny and engaging systematically with the methodology underpinning the rankings; addressing the robustness of this methodology and considering alternative approaches. We will also use econometric analyses based on detailed micro data from other data sources. Thus far the research team has worked on all three of the indicators and come up with some interesting findings. In terms of key Findings McCormack has highlighted some of the issues thrown up by the Doing Business (DB) project conducted on an annual basis by the World Bank The role of law in promoting economic development has long been a controversial one. Certain legal systems may be conducive to higher rates of economic development but the necessary causal link between the two is difficult to establish. Nevertheless, the DB project and associated rankings has sparked the attention of politicians and policy makers across the globe. The DB project stresses the importance of a well-functioning legal and regulatory system in creating an effective market economy and, as a corollary, the deleterious effects that a poor regulatory environment can have on output, employment, investment, productivity, and living standards. The DB project has focused attention on law and development issues; its methodology is fairly transparent and it has produced data sets that are of great benefit to researchers. Nevertheless, the way in which the rankings are compiled encourages countries to 'game' the system. The rankings embody, explicitly or implicitly, a particular set of preferences, whose relationship with matters of economic development is at best uncertain. Moreover, the DB project largely, if not entirely, mirrors the law on the books which may not necessarily reflect what happens in practice in a particular country. Our findings suggest that the DB project should not survive, at least in its present form, because of the theoretical and methodological deficiencies inherent in its conception and implementation. Our research digs down into the methodology of particular indicators such as 'Getting Credit' and 'Resolving Insolvency' and their relationship with a questionable set of normative assumptions. The first category of findings on the overall implementation of the Chinese corporate bankruptcy law, China Enterprise Bankruptcy Law 2006, will be published as an article "Resolving Corporate Insolvencies in China: the Gap between Law and Reality" with Miami International & Comparative Law Review volume 27, 2020. In 2006, China promulgated its first rescue-oriented Enterprise Bankruptcy Law 2006 with the objective of facilitating more corporate rescues, establishing a market-based corporate insolvency profession and enhancing cross-border insolvencies. Zhang uses the data collected from the official sources to investigate whether the implementation of this law is a success or a failure; in particular, the data collected by Zhang focus on the use of the three main corporate insolvency procedures, reorganization, composition and liquidation, under the new law to find what happens in the real world. His findings show that while China has a modern bankruptcy law in the books, its implementation remains weak. The data reveal that only around 1 per cent of bankrupt companies in China could access the formal court-involved bankruptcy procedure to exit the markets. In spite of the legislative efforts in encouraging corporate rescues, over 95 per cent of the existing corporate bankruptcy procedures are liquidations, and only less than 5 per cent of bankruptcy procedures are company reorganizations. Apart from the reorganization procedure, the composition procedure enshrined in China's new corporate bankruptcy statute was expected to be used as a flexible rescue mechanism. However, Zhang's data reveals that from 2007 to 2015, there are there only 50 such cases suggesting that the composition procedure as the second corporate rescue option is almost ignored in practice. Zhang's data concludes that the overall implementation of China's corporate bankruptcy law can hardly be considered a success. In view of these findings, it is recommended that China's current excessively court-centred bankruptcy system be overhauled and that a market-based bankruptcy regime that relies on the work of insolvency practitioners, including lawyers and accountants, be established. The second category of findings is on the use of the corporate reorganization procedure under China's Enterprise Bankruptcy Law 2006. These findings are published in a monograph entitled "Corporate Reorganizations in China: An Empirical Analysis" with Cambridge University Press in 2019. To a large extent, China's corporate reorganization procedure is imported from the USA by transplanting Chapter 11 of the US Bankruptcy Code 1987. Zhang collected all 722 corporate reorganization cases taking place in China between 2007 and 2015, finding that although this procedure is not widely used, the strength of this rescue procedure is apparent, since it significantly preserves going concern value of bankrupt companies by increasing the debt recovery rates from less 10 per cent in liquidations to 24 per cent in reorganizations. This is mainly achieved by replacing piecemeal liquidation with reorganization. As for control models, China's new corporate bankruptcy law aims to absorb the best practice both in the UK and USA by providing two alternatives: the practitioner in possession model popular in the UK and the debtor in possession model excelling in the USA. But Zhang's data points in an unexpected direction: most corporate reorganizations in China actually use a kind of the government in possession control model, since local government play the dominant roles in the local-court-involved judicial corporate reorganization procedures. This may undermine creditor protection. At the same time, Zhang's data suggest that cram-down, a mechanism use by the court to approve a reorganization plan not voted for by creditors, is shockingly used in around one quarter of the existing corporate reorganizations. Zhang's data find that many courts, under pressure from local government, may not apply the specific requirements under the bankruptcy law when giving cram down approvals for non-consensual reorganization plans. In the light of these findings, it is recommended that China further empower creditors in the process of corporate reorganizations since creditors are considerably marginalised both in the law and in practice in corporate bankruptcy procedures. The third category of findings sheds light on the use of the bankruptcy alternative procedure in China. These findings are included in an article entitled "The Corporate Bankruptcy Substitute in China" in Columbia Journal of Asian Law volume 33, 2020. Given that generally speaking the Chinese corporate bankruptcy law is not accessible for most bankrupt companies, a pressing issue is the alternative or substitute procedure in China. Zhang investigates the Chinese corporate bankruptcy substitute procedure, the use of pari passu in judgment executions. In particular, Zhang chooses a local court located in eastern China for a case study, exploring whether creditors can get a fair treatment in the absence of bankruptcy procedures. Zhang's data conclude that such a bankruptcy substitute is not well applied in China's judicial practice, since it is only used in around 10 per cent of eligible judgment executions. It is evident that both the formal bankruptcy procedure and the bankruptcy substitute procedure are not immediately accessible for creditors in China. This means that China could do more in establishing a legal infrastructure to protect creditors, especially given China's transition to a credit-centred economy. But Zhang's data also reveal sympathetic approachs on the part of individual judges when deciding whether to use pari passu in judgment executions. In many cases, bearing in mind the rigid law curtailing the use of pari passu in judgment execution, many judges broadly interpret the conditions on the use of this procedure, so that a more inclusive approach can be used to help alleviate the grievances of judgment creditors. The fourth category is on China's involvement in globalised cross border insolvency collaboration. Zhang has finished his fieldwork in China in the summer of 2019 and has presented his findings at the project conference organised by the Chinese partner, Wuhan University, in December 2019 in Shenzhen, China, as well as at a workshop held at the Guangdong Province Supreme People's Court, China, the same month. The data collected on this issue will form a journal article, which is submitted for publication consideration by the end of 2020. Although there are many studies on China's cross border insolvency law, very few are based on empirical data and even fewer examine it against the background of China's private international law on recognising foreign judgments. Zhang's work make the breakthrough on these two fronts. Zhang's preliminary findings suggest that the Chinese cross border insolvency is more or less a one-way street: it is difficult for a foreign bankruptcy procedure to obtain recognition in China, whereas Chinese bankruptcy representatives can easily obtain recognition in some foreign countries, notably in some developed jurisdictions, such as the USA and UK. Zhang suggests that local protectionism is still a significant factor hindering Chinese courts in entertaining foreign corporate bankruptcy recognition requests. This finding indicates the importance of China establishing a more robustly independent judicial system to deliver fairness and justice for all. A group of members of research team members, Andrew Keay, Joan Loughrey and Jingchen Zhao, have focused their attention primarily on a third World Bank 'Doing Business' indicator; namely the protection of minority investors. Minority shareholders in large companies, and particularly where there is a majority/controlling shareholder, can be in a vulnerable position as they are not likely to be able to have much influence in a company or how its affairs are conducted. Shareholders can be oppressed. The position in which minority shareholders find themselves has caused many governments to provide protection in some form or another for minority shareholders. There are various mechanisms that have been embraced, from a corporate law or corporate governance perspective to grant minority shareholders some protection, one being a provision which allows shareholders to seek relief from the courts where oppression exists. China does not have a dedicated provision which gives minority shareholders such an action, but given that most of its companies have concentrated share ownership with a dominant majority shareholder, it is in need of such a provision. Keay et al examined the provisions in China's company and securities law which purport to provide protection for shareholders and he has done this in conjunction with consideration of the provision in UK company law that provides a form of oppression remedy. Importantly this study has identified Chinese cases decided since 2012 where shareholders have brought claims in situations where oppression was, effectively, alleged. They found that the protections provided for shareholders are scattered throughout the legislation and there is little system employed. This appears to be confusing for claimants and is born out by the aforementioned cases. Protection remains underdeveloped and The study concludes that the inclusion of some form of oppression provision is necessary and the introduction of an oppression action or a revising of the present provisions, taking into account aspects of the UK's provision, may well improve the lot of minority shareholders. Working with a set of empirical data, Jingchen Zhao has considered in particular the role of the derivative action in protecting minority investors (shareholders) and promoting sound corporate governance. The derivative action allows minority shareholders to sue on behalf of a company with a view to redressing wrongs done to the company such as unlawful profit taking by company controllers and their acting for largely personal gain rather than on behalf of the company. The derivative action procedure has been introduced in China but Zhao has highlighted certain problems with its practical implementation. He has found that the vast majority of shareholders, including both individual and institutional shareholders have been hindered from bringing derivative actions by the shareholding threshold imposed by Chinese company law. Most of the derivative lawsuits to date have involved private companies and it is difficult for shareholders to invoke this action in public companies and especially in listed ones. Current Chinese company law provides that shareholders in joint stock limited liability companies (JSLCs) who intend to bring derivative action are required to hold 1% or more of the company's shares for 180 consecutive days. Drawing on the empirical evidence, Zhao proposes a lower shareholding percentage requirement for listed companies that would enable a greater proportion of minority shareholders to use the derivative action regime. Zhao has also examined the litigation costs structure in respect of derivative actions in China and the findings suggest that the current legal rules have discouraged shareholders from bringing derivative actions. Based on the costs regime in the UK as well as in the US and Japan, practical reform suggestions such as he use of contingency fees and fixed fees are advanced with a view to alleviating some of the difficulties in China. |
| Exploitation Route | By policy makers and regulators in China By adjusting the shareholding threshold requirement for the bringing of derivative actions in particular in relation to listed companies And by reforming the litigation fee structure for derivative actions through the introduction of fixed fees and contingency fees By the World Bank though removing the focus on rankings in the 'Doing Business' (DB) project. We develop this point below. The detailed engagement with particular 'Doing Business' indicators in our research shows the advantages of providing options that are based upon experience rather than setting out answers. The question becomes not whether legal rules have been transplanted from one country to another but whether the legal institutions in a particular country as a whole function in such a way as to support rather than to obstruct economic growth. Addressing this question calls more for a process of continuous adjustment and learning from experience rather than a simple 'big bang' solution which the Doing Business set of indicators appears implicitly to endorse. While our research has highlighted flaws in some of the methodological implications underlying the process of data collection as well as possible inaccuracies, nevertheless the DB project remains a very valuable repository of statistical information and law and development assumptions. This repository may be quarried in the course of policy formation and for purposes of comparative political economy. But the DB project should be stripped of its preoccupation with rankings - the process of simplifying complex matters of policy execution and design into a simple, single ranking. Such reductionism pays scant regard to subtlety and nuance disrespecting the reality that various functions might be carried out under the framework of a legal rule in one country but through an extra-legal procedure in another country. Context and cultural sensitivity are all important in the 'real' world and reducing all sorts of complicated matters to a single ranking hardly seems compatible with bringing about genuine improvements in the legal architecture for doing business. |
| Sectors | Financial Services, and Management Consultancy,Government, Democracy and Justice,Security and Diplomacy |
| Description | This research aims to show, on the basis of the UK experience, World Bank data and other international benchmarks, how a sound financial system fosters economic growth and what part legal institutions can play in facilitating a sound financial system. It addresses in particular how growth can be sustained through legal reforms that will: • enhance the protections available to minority investors • support the availability of credit and contributing to lower-cost credit • support the restructuring of ailing businesses. The research is likely to be of great relevance to practitioners and policy makers working in the field. The research will (1) support policy makers to design legislative approaches towards the elimination of zombie companies; (2) support NGOs, policy makers in China and stakeholders to gain a better understanding of approaches that may be taken in respect of resolving insolvency, getting credit, and monitory shareholder protection; and (3) To facilitate opportunities for further reform of corporate law, securities law and insolvency law in China. It should also be of great benefit to academics in the fields of law and regulation, law and development, capital market studies and business and finance more generally as well as to China specialists. The World Bank 'Doing Business' report has produced rankings which are grounded on the notion that smarter business regulation promotes economic growth. The DB rankings have been issued annually since 2004 and the 2020 rankings includes 12 sets of indicators for 190 economies. Each economy is ranked on the individual indicators and also in an overall table. According to the 2016 ranking when we started this project, the UK is ranked 6th and China 84th in the 'Doing Business' report. Singapore is 1st and Hong SAR is 5th; these Asian economies have built on UK law and are renowned for the quality of their legal infrastructure in supporting development of the financial system. China might also benefit from the UK experience in building its legal infrastructure. The data we rely on will come principally from the World Bank Doing Business (DB) reports and rankings. We will focus on 3 indicators that are particularly pertinent to the development of a mature financial system and in relation to them all China ranks far below the UK including protecting minority investors; getting credit; resolving insolvency. Our approach takes the relevant DB rankings as a guide but subjects them to critical scrutiny and engaging systematically with the methodology underpinning the rankings; addressing the robustness of this methodology and considering alternative approaches. We also used econometric analyses based on detailed micro data from other data sources. Thus far the research team has worked on all three of the indicators and come up with some interesting findings. In terms of key Findings McCormack has highlighted some of the issues thrown up by the Doing Business (DB) project conducted on an annual basis by the World Bank The role of law in promoting economic development has long been a controversial one. Certain legal systems may be conducive to higher rates of economic development but the necessary causal link between the two is difficult to establish. Nevertheless, the DB project and associated rankings has sparked the attention of politicians and policy makers across the globe. The DB project stresses the importance of a well-functioning legal and regulatory system in creating an effective market economy and, as a corollary, the deleterious effects that a poor regulatory environment can have on output, employment, investment, productivity, and living standards. The DB project has focused attention on law and development issues; its methodology is fairly transparent and it has produced data sets that are of great benefit to researchers. Nevertheless, the way in which the rankings are compiled encourages countries to 'game' the system. The rankings embody, explicitly or implicitly, a particular set of preferences, whose relationship with matters of economic development is at best uncertain. Moreover, the DB project largely, if not entirely, mirrors the law on the books which may not necessarily reflect what happens in practice in a particular country. Our findings suggest that the DB project should not survive, at least in its present form, because of the theoretical and methodological deficiencies inherent in its conception and implementation. Our research digs down into the methodology of particular indicators such as 'Getting Credit' and 'Resolving Insolvency' and their relationship with a questionable set of normative assumptions. The first category of findings on the overall implementation of the Chinese corporate bankruptcy law, China Enterprise Bankruptcy Law 2006, will be published as an article "Resolving Corporate Insolvencies in China: the Gap between Law and Reality" with Miami International & Comparative Law Review volume 27, 2020. In 2006, China promulgated its first rescue-oriented Enterprise Bankruptcy Law 2006 with the objective of facilitating more corporate rescues, establishing a market-based corporate insolvency profession and enhancing cross-border insolvencies. Zhang uses the data collected from the official sources to investigate whether the implementation of this law is a success or a failure; in particular, the data collected by Zhang focus on the use of the three main corporate insolvency procedures, reorganization, composition and liquidation, under the new law to find what happens in the real world. His findings show that while China has a modern bankruptcy law in the books, its implementation remains weak. The data reveal that only around 1 per cent of bankrupt companies in China could access the formal court-involved bankruptcy procedure to exit the markets. In spite of the legislative efforts in encouraging corporate rescues, over 95 per cent of the existing corporate bankruptcy procedures are liquidations, and only less than 5 per cent of bankruptcy procedures are company reorganizations. Apart from the reorganization procedure, the composition procedure enshrined in China's new corporate bankruptcy statute was expected to be used as a flexible rescue mechanism. However, Zhang's data reveals that from 2007 to 2015, there are there only 50 such cases suggesting that the composition procedure as the second corporate rescue option is almost ignored in practice. Zhang's data concludes that the overall implementation of China's corporate bankruptcy law can hardly be considered a success. In view of these findings, it is recommended that China's current excessively court-centred bankruptcy system be overhauled and that a market-based bankruptcy regime that relies on the work of insolvency practitioners, including lawyers and accountants, be established. The second category of findings is on the use of the corporate reorganization procedure under China's Enterprise Bankruptcy Law 2006. These findings are published in a monograph entitled "Corporate Reorganizations in China: An Empirical Analysis" with Cambridge University Press in 2019. To a large extent, China's corporate reorganization procedure is imported from the USA by transplanting Chapter 11 of the US Bankruptcy Code 1987. Zhang collected all 722 corporate reorganization cases taking place in China between 2007 and 2015, finding that although this procedure is not widely used, the strength of this rescue procedure is apparent, since it significantly preserves going concern value of bankrupt companies by increasing the debt recovery rates from less 10 per cent in liquidations to 24 per cent in reorganizations. This is mainly achieved by replacing piecemeal liquidation with reorganization. As for control models, China's new corporate bankruptcy law aims to absorb the best practice both in the UK and USA by providing two alternatives: the practitioner in possession model popular in the UK and the debtor in possession model excelling in the USA. But Zhang's data points in an unexpected direction: most corporate reorganizations in China actually use a kind of the government in possession control model, since local government play the dominant roles in the local-court-involved judicial corporate reorganization procedures. This may undermine creditor protection. At the same time, Zhang's data suggest that cram-down, a mechanism use by the court to approve a reorganization plan not voted for by creditors, is shockingly used in around one quarter of the existing corporate reorganizations. Zhang's data find that many courts, under pressure from local government, may not apply the specific requirements under the bankruptcy law when giving cram down approvals for non-consensual reorganization plans. In the light of these findings, it is recommended that China further empower creditors in the process of corporate reorganizations since creditors are considerably marginalised both in the law and in practice in corporate bankruptcy procedures. The third category of findings sheds light on the use of the bankruptcy alternative procedure in China. These findings are included in an article entitled "The Corporate Bankruptcy Substitute in China" in Columbia Journal of Asian Law volume 33, 2020. Given that generally speaking the Chinese corporate bankruptcy law is not accessible for most bankrupt companies, a pressing issue is the alternative or substitute procedure in China. Zhang investigates the Chinese corporate bankruptcy substitute procedure, the use of pari passu in judgment executions. In particular, Zhang chooses a local court located in eastern China for a case study, exploring whether creditors can get a fair treatment in the absence of bankruptcy procedures. Zhang's data conclude that such a bankruptcy substitute is not well applied in China's judicial practice, since it is only used in around 10 per cent of eligible judgment executions. It is evident that both the formal bankruptcy procedure and the bankruptcy substitute procedure are not immediately accessible for creditors in China. This means that China could do more in establishing a legal infrastructure to protect creditors, especially given China's transition to a credit-centred economy. But Zhang's data also reveal sympathetic approachs on the part of individual judges when deciding whether to use pari passu in judgment executions. In many cases, bearing in mind the rigid law curtailing the use of pari passu in judgment execution, many judges broadly interpret the conditions on the use of this procedure, so that a more inclusive approach can be used to help alleviate the grievances of judgment creditors. The fourth category is on China's involvement in globalised cross border insolvency collaboration. Zhang has finished his fieldwork in China in the summer of 2019 and has presented his findings at the project conference organised by the Chinese partner, Wuhan University, in December 2019 in Shenzhen, China, as well as at a workshop held at the Guangdong Province Supreme People's Court, China, the same month. The data collected on this issue will form a journal article, which is submitted for publication consideration by the end of 2020. Although there are many studies on China's cross border insolvency law, very few are based on empirical data and even fewer examine it against the background of China's private international law on recognising foreign judgments. Zhang's work make the breakthrough on these two fronts. Zhang's preliminary findings suggest that the Chinese cross border insolvency is more or less a one-way street: it is difficult for a foreign bankruptcy procedure to obtain recognition in China, whereas Chinese bankruptcy representatives can easily obtain recognition in some foreign countries, notably in some developed jurisdictions, such as the USA and UK. Zhang suggests that local protectionism is still a significant factor hindering Chinese courts in entertaining foreign corporate bankruptcy recognition requests. This finding indicates the importance of China establishing a more robustly independent judicial system to deliver fairness and justice for all. A group of members of research team members, Andrew Keay, Joan Loughrey and Jingchen Zhao, have focused their attention primarily on a third World Bank 'Doing Business' indicator; namely the protection of minority investors. Minority shareholders in large companies, and particularly where there is a majority/controlling shareholder, can be in a vulnerable position as they are not likely to be able to have much influence in a company or how its affairs are conducted. Shareholders can be oppressed. The position in which minority shareholders find themselves has caused many governments to provide protection in some form or another for minority shareholders. There are various mechanisms that have been embraced, from a corporate law or corporate governance perspective to grant minority shareholders some protection, one being a provision which allows shareholders to seek relief from the courts where oppression exists. China does not have a dedicated provision which gives minority shareholders such an action, but given that most of its companies have concentrated share ownership with a dominant majority shareholder, it is in need of such a provision. Keay et al examined the provisions in China's company and securities law which purport to provide protection for shareholders and they have done this in conjunction with consideration of the provision in UK company law that provides a form of oppression remedy. Importantly this study has identified Chinese cases decided since 2012 where shareholders have brought claims in situations where oppression was, effectively, alleged. the study has found that the protections provided for shareholders are scattered throughout the legislation and there is little system employed. This appears to be confusing for claimants and is born out by the aforementioned cases. Protection remains underdeveloped and the study concludes that the inclusion of some form of oppression provision is necessary and the introduction of an oppression action or a revising of the present provisions, taking into account aspects of the UK's provision, may well improve the lot of minority shareholders. Working with a set of empirical data, Jingchen Zhao has considered in particular the role of the derivative action in protecting minority investors (shareholders) and promoting sound corporate governance. The derivative action allows minority shareholders to sue on behalf of a company with a view to redressing wrongs done to the company such as unlawful profit taking by company controllers and their acting for largely personal gain rather than on behalf of the company. The derivative action procedure has been introduced in China but Zhao has highlighted certain problems with its practical implementation. He has found that the vast majority of shareholders, including both individual and institutional shareholders have been hindered from bringing derivative actions by the shareholding threshold imposed by Chinese company law. Most of the derivative lawsuits to date have involved private companies and it is difficult for shareholders to invoke this action in public companies and especially in listed ones. Current Chinese company law provides that shareholders in joint stock limited liability companies (JSLCs) who intend to bring derivative action are required to hold 1% or more of the company's shares for 180 consecutive days. Drawing on the empirical evidence, Zhao proposes a lower shareholding percentage requirement for listed companies that would enable a greater proportion of minority shareholders to use the derivative action regime. Zhao has also examined the litigation costs structure in respect of derivative actions in China and the findings suggest that the current legal rules have discouraged shareholders from bringing derivative actions. Based on the costs regime in the UK as well as in the US and Japan, practical reform suggestions such as he use of contingency fees and fixed fees are advanced with a view to alleviating some of the difficulties in China. |
| Sector | Financial Services, and Management Consultancy,Government, Democracy and Justice |
| Impact Types | Policy & public services |
| Description | In the underlying methodology for the research we referenced the World Bank Doing Business project. Our research suggests that notwithstanding the fact that China has been praised for progress on a number of Doing Business indicators, the World Bank did not evaluate China fairly. Our research suggests that the Wold Bank Doing Business reports and associated rankings suffered from a number of serious flaws in both design and execution. The World Bank has now discontinued the Doing Business project and the Doing Business project and is intended to replace it, partially at least, with a Business Enabling Environment (BEE) project - see https://www.worldbank.org/en/programs/business-enabling-environment.The Principal Investigator, Gerard McCormack, has been consulted by the World Bank Group on the design etc. of the replacement. |
| Geographic Reach | Multiple continents/international |
| Policy Influence Type | Contribution to a national consultation/review |
| Description | Jingchen and Chuyi responded to the China Securities Regulatory Commission's call for a call for public comment on revising Corporate Governance Code in China based on their research findings of the project |
| Geographic Reach | Asia |
| Policy Influence Type | Contribution to a national consultation/review |
| Description | new module for LLM course |
| Geographic Reach | Multiple continents/international |
| Policy Influence Type | Influenced training of practitioners or researchers |
| Impact | As part of the project, Jingchen's research on minority shareholder protection and protecting the vulnerable are used as two seminar topics for his new LL.M module (Postgraduate level) on "Corporate Social Responsibility (40697)" at Nottingham Trent University, which start running from Sep. 2020. |
| Title | Database of Chinese Shareholder litigation |
| Description | All cases have been collected via Bei Da Fa Bao (????) in relation to derivative actions and on oppression actions |
| Type Of Material | Database/Collection of data |
| Year Produced | 2017 |
| Provided To Others? | No |
| Impact | This database provides an overview of shareholders' litigation and provides a basis for the empirical research. |
| Description | Chinese law joint project between the University of Leeds and Wuhan University |
| Organisation | Wuhan University |
| Country | China |
| Sector | Academic/University |
| PI Contribution | The following academics from Leeds have worked on the project - Gerard McCormack, Jingchen Zhao, David (Roger) Halson, Joan Loughrey, Andrew Keay, Sarah Brown and Zinian Zhang. They will be supported by a research assistant who will work for 50% of the time on verification of methodological assumptions, data collection and analysis, research dissemination and impact generating activities. Gerard McCormack has overall responsibility for implementation of the project at the Leeds end. He has substantial experience in the leading and managing of multi-partner projects. He has also worked in Singapore and been a consultant for the government of the Hong Kong Special Administrative Region on the reform of their Companies Ordinance. Jingchen Zhao is responsible for liaison with the team at Wuhan. He is fluent in both Chinese and English and has developed close working relationships with Chinese based colleagues. |
| Collaborator Contribution | The following academics from Wuhan have worked on the project - Professor Xian Huang (PI), Professor Min Pan, Professor Li Ma, Associate Professor Jun Xie, Associate Professor Ting Hu, Assistant Professor Yan Liu, Assistant Professor Jingwen Yu. They will be supported by six Research Assistants who will benefit from the investigators' combined expertise and experience. Xian Huang has overall responsibility for implementation of the project at the Wuhan end and he has also substantial experience in the leading and managing of multi-partner projects. Yan Liu will be responsible for liaison with the team at Leeds. Educated in the US, he is fluent in both Chinese and English and has developed close working relationships with colleagues at Leeds. |
| Impact | The partnership has already produced several reports and publications. The Wuhan side has also organized several workshops. A joint conference will take place in Leeds in April 2018. |
| Start Year | 2017 |
| Description | Dr Zhang and Professor McCormack Gave Presentation in School of Law, University of Wuhan |
| Form Of Engagement Activity | A talk or presentation |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Postgraduate students |
| Results and Impact | On 18th December 2018, Dr Zhang and Professor McCormack were invited by Wuhan University Law School to give a seminar on 17th December and were welcomed by Professors Yuan Kang and Li Anan, on behalf of the Dean of the Law School, Professor Feng Guo. That evening, Dr Zhang gave a presentation on his latest empirical studies of corporate bankruptcy law and discussed his empirical legal research approaches in investigating the gap between the law in the books and the law in action. Professor McCormack commented on the comparative legal studies. Around forty faculty members and PhD researchers from Wuhan University Law School join the seminar, and a productive discussion between Dr Zhang and the audience benefited both sides. |
| Year(s) Of Engagement Activity | 2018 |
| Description | Dr Zinian Zhang Presents at the Guangdong People's Supreme Court |
| Form Of Engagement Activity | A talk or presentation |
| Part Of Official Scheme? | No |
| Geographic Reach | National |
| Primary Audience | Policymakers/politicians |
| Results and Impact | Dr Zinian Zhang delivered a presentation at the Guangdong People's Supreme Court in December 2019. He introduced this project to the audience, presented his empirical finding on insolvency law and discussed with Chinese judges on the future reforms in Chinese insolvency law. |
| Year(s) Of Engagement Activity | 2019 |
| Description | Dr. Zinian Zhang Presented at Hubei Provincial Lawyers Association |
| Form Of Engagement Activity | A talk or presentation |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Professional Practitioners |
| Results and Impact | On Sunday 16th December 2018, Dr Zhang was invited by the Hubei Provincial Lawyers Association to give a seminar on corporate bankruptcy of China's listed companies, which was well attended by the practitioners from the city of Wuhan as well as from Beijing and Shanghai. Dr Zhang's exposure to local practitioners paves the way for the future fieldwork in Wuhan, a mega city in China, and the networking will strengthen his empirical studies. |
| Year(s) Of Engagement Activity | 2018 |
| Description | Dr. Zinian Zhang Presented in Zhongnan University of Economics and Law |
| Form Of Engagement Activity | A talk or presentation |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Postgraduate students |
| Results and Impact | In the evening of 15th December 2018, Dr Zhang visited Zhongnan University of Economics and Law, located in the same city Wuhan, to give a seminar. At Zhongnan University, Dr Zhang was welcomed by the Dean of the Criminal Justice School, Professor Hu Xiangyang, who was a visiting professor at Leeds years ago. The evening seminar attracted some thirty participants, most of them PhD students from both the Zhongnan Law and Criminal Justice Schools. During the pre-seminar reception with Professors Hu Xiangyang and Zhou Ling, Dr Zhang informed the hosts of the existing academic collaboration between the Leeds Law School and the Zhongnan Law School, and Professor Hu expressed his interests that the Leeds cooperation with the Zhongnan Law School be expanded to his Criminal Justice School. |
| Year(s) Of Engagement Activity | 2018 |
| Description | Dr. Zinian Zhang presented at at the European Empirical Legal Study Society annual conference |
| Form Of Engagement Activity | Participation in an activity, workshop or similar |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Schools |
| Results and Impact | Dr. Zinian Zhang presented a paper on 'control in Chinese corporate reorganisations' at the European Empirical Legal Study Society annual conference held in the University of Leuven, Belgium in March 2018; |
| Year(s) Of Engagement Activity | 2018 |
| Description | Dr. Zinian Zhang presented at the 2018 INSOL annual academic colloquium |
| Form Of Engagement Activity | A formal working group, expert panel or dialogue |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Professional Practitioners |
| Results and Impact | Dr. Zinian Zhang presented a paper on 'China's cross border corporate reorganisations' at the 2018 INSOL annual academic colloquium in London; |
| Year(s) Of Engagement Activity | 2018 |
| Description | Jingchen Zhao Presents at Nottingham Law School |
| Form Of Engagement Activity | A talk or presentation |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Schools |
| Results and Impact | Jingchen Zhao, Rebecca Parry, Chuyi Wei - Regulating zombie companies through insolvency proceedings in China, expectations and reality, presented in Nottingham Law School research seminar series March 2020. |
| Year(s) Of Engagement Activity | 2020 |
| Description | Jingchen Zhao Presents at Nottingham Law School |
| Form Of Engagement Activity | A talk or presentation |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Schools |
| Results and Impact | Jingchen Zhao, Chuyi Wei - Synchronizing norms and institutions - towards a more effective, balanced and accessible settings of derivative action scheme in China, presented in Nottingham Law School research seminar series March 2020. |
| Year(s) Of Engagement Activity | 2020 |
| Description | Leeds -Wuhan Conference: Law and Economics in UK and China |
| Form Of Engagement Activity | A formal working group, expert panel or dialogue |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Schools |
| Results and Impact | This conference is aimed at strengthening the collaboration between Wuhan and Leeds, setting plan for future conferences and explore the possibility of developing further interdisciplinary research. At the end of the conference, dates for another two conferences are agreed and members from both teams have changed views and expressed interest for conducting interdisciplinary research of law and finance. Five speakers have given presentations at the conference and here is a summary of the main points: [McCormack: Why 'Doing Business ' with the World Bank may be bad for you] ?Flaws in the Methodology of the WB DB report ?More consideration should be given to law in action [Zhao: Shareholder litigation in China: empirical evidence] ?Derivative actions are impeded by the shareholding requirement and funding problem ?There is an increasing number of derivative actions, especially in most developed regions in China [Brown: Provision of credit to the private individual: Protection and control] ?The UK regime for protecting 'credit' consumers ?The purpose of overindebtedness procedures: provide relief/rehabilitation for the debtor [Zhang: Cross-Border Corporate Reorganizations in China] ?The China Enterprise Bankruptcy Law of 2006 Article 5 ?Worldwide Effects of China Court Bankruptcy Rulings ?Foreign Bankruptcy Rulings Bind Assets in China subject to Recognition [Chen: China Stock Market Regulations] ?Market reacts significantly and negatively to filings of lawsuits. ?Market reaction to adjudication of lawsuits is not significant. ?Informed investors are more pessimistic on suitcases in different locations. [Liu Yan: Leeds-WHU Joint Project on Law and Finance] ?Bank ownership in China become more diffused ?Starting from 2014, there are 143 corporate bond defaults in China, involving 66 companies; Government involvement in 23 out of 66 case |
| Year(s) Of Engagement Activity | 2019 |
| Description | Professor Gerard McCormack and Dr Zinian Zhang attended World University Network (RUC - WUN) Think Tank Summit |
| Form Of Engagement Activity | A formal working group, expert panel or dialogue |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Schools |
| Results and Impact | Professor McCormack and Dr Zhang, on behalf of the University of Leeds, attended the Renmin University of China - World University Network (RUC - WUN) Think Tank Summit in Beijing on 23rd and 24th March 2018. At the summit, Professor McCormack and Dr Zhang gave the papers examining the interaction between law and finance, which is particularly relevant in the context of China's Belt and Road Initiative promoted by the Chinese authorities. The Renmin seminar was joined by the judges from the China Supreme People's Court and other local courts; some twenty local insolvency practitioners were also invited. |
| Year(s) Of Engagement Activity | 2018 |
| URL | https://wun.ac.uk/article/renmin-university-of-china-ruc-the-worldwide-universities-network-wun-thin... |
| Description | Professor Gerard McCormack and Dr Zinian Zhang gave presentation in Cambridge law school |
| Form Of Engagement Activity | A talk or presentation |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Schools |
| Results and Impact | Professor Gerard McCormack and Dr Zinian Zhang were invited by Cambridge Law School in July 2018 to speak at a workshop with the delegates from the Zhejiang Provincial Supreme People's Court, China, on Chinese bankruptcy law reforms |
| Year(s) Of Engagement Activity | 2018 |
| Description | Professor McCormack and Dr Zhang made visits to Beijing Universities |
| Form Of Engagement Activity | Participation in an open day or visit at my research institution |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Schools |
| Results and Impact | Professor McCormack and Dr Zhang toured China University of Political Science and Law on Monday 26 March 2018 in the afternoon, meeting Professor Li Shuguang, one of the draftsmen of the China Enterprise Bankruptcy Law of 2006, Professors Chen Xiahong and Zhang Qingyu. Professor McCormack introduced the ESRC-funded research project on the development of China's bankruptcy law to the hosts. At this visit, Professor McCormack and Dr Zhang were granted honourable membership by the University's national bankruptcy law research centre. That evening, Dr Zhang presented a paper at the seminar organised by the University's bankruptcy law research centre, which was attended by around 60 faculty staff, students and insolvency practitioners. Read the news report in Chinese from this university, please click here. On the visit to Tsinghua University on Tuesday 27 March 2018, Professor Gerard McCormack and Dr Zinian Zhang was greeted by Professor Simin Gao, one of the top bankruptcy scholars in China. During the Tsinghua trip, they also met Professor Shangshang Liang, an eminent company lawyer, and Professor Laifan Lin, one of China's constitution law authorities. As scheduled, Dr Zhang delivered a seminar at Tsinghua that evening. Professor McCormack and Dr Zhang's Beijing visit considerably raised the research profile of the Leeds University Law School, marking the first step for future research collaboration with China's top universities. |
| Year(s) Of Engagement Activity | 2018 |
| Description | The Conference for Chinese Law Project Takes Place in Wuhan, China |
| Form Of Engagement Activity | A formal working group, expert panel or dialogue |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Schools |
| Results and Impact | On December 15, 2018, Professor Gerard McCormack, Principal Investigator of the Chinese law project (sponsored by the ESRC) attended the conference in Wuhan, China on Reconsideration of Law, Finance and Economic Growth. Professor Gerard McCormack introduced the establishment, purpose, and content of international insolvency law standards and focused on the applicability of international insolvency law standards. Professor Jingchen Zhao and Dr Chuyi Wei discussed their empirical research on derivative in China. Dr Zinian Zhang discussed the alternative procedure to the formal bankruptcy law in China. The Leeds team was warmly welcomed by Mr Zuoyong Hou, the head of the Institute of Science and Technology Development at the University of Wuhan and Professor Qingyuan Li, Vice Dean of the economics and management school at Wuhan University. The members in the Wuhan team, including Professor Xian Huang, Professor Min Pan, Professor Yan Liu respectively gave speeches on the effects of legal origin on financial development, the effects of Chinese Labor Contract Law on corporate leverage level, and the ownership networks of Chinese banks. Professor Xiaoyan Song, head of the law school of Shanghai University of Finance and Economic also attended the conference and gave a speech on the and the role of legal origin and political, cultural factors in financial development. Other participants including scholars and postgraduate students. The Leeds team, together with the Wuhan team, has already delivered a number of innovative and interdisciplinary works, including more than ten academic papers and eight research reports. The conference has contributed to an enhanced understanding of interdisciplinary studies of law and finance. It has also explored the latest theoretical discussions and institutional developments in Britain and China This conference might inspire future studies on the comparative aspects of two countries and can contribute to the policymaking in both countries. |
| Year(s) Of Engagement Activity | 2018 |
| URL | https://essl.leeds.ac.uk/law/news/article/948/school-of-law-academics-attend-conference-for-the-chin... |
| Description | The Fifth Project Meeting/Conference on Law and Finance Held in Shenzhen, China |
| Form Of Engagement Activity | A formal working group, expert panel or dialogue |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Schools |
| Results and Impact | As part of the ESRC Newton Fund-sponsored project, the Leeds team led by Professors Gerard McCormack and Jingchen Zhao attended the fifth conference hosted by the Chinese partner, Wuhan University School of Management, in Shenzhen, China between 13 and 14 December 2019. The Wuhan team is headed by Professor Huang Xian, an eminent expert on banking finance. Professor Wan Wai Yee from Singapore Management University was invited to give the keynote speech. Prior to the conference, organised by the Wuhan host, the participants visited several leading financial firms headquartered in Shenzhen on 13 December 2019, including China's first online bank, WeBank, which is opened by China's internet giant, Tencent, and CredEx Fintech, a pioneer software company specialising on customer credibility examination for commercial banks. Professors McCormack and Zhao held talks with the senior managers from these firms on the issues of credit protection and corporate governance. The one-day conference was officially opened on 14 December 2019 at Shenzhen Wuzhou Guest House. Professor Huang Xian gave the first speech, highlighting the achievement and challenges of the joint project. Professor Gerard McCormack, the principal investigator of the Leeds team, reported the progress of the research project from the Leeds side, proposing the future collaboration. In response to the Wuhan team's suggestion, Professor Jingchen Zhao from the Nottingham Law School discussed the possibility of pairing the team members from both sides to co-author papers for publication in both Chinese and English. The morning session speakers were Professors Zhao Zhen, Hu Ting, Yu Jingwen and Liu Yan, all of them from Wuhan University. The afternoon session was chaired by Professor Gerard McCormack, who also presented a paper, followed by the presentations by Professor Jingchen Zhao and Dr Zhang Zinian. After the conference, Dr Zhang Zinian visited the Shenzhen Municipal Intermediate People's Court Bankruptcy Chamber on 16 December 2019, and delivered a lecture for the bankruptcy judges and insolvency practitioners from Guangdong Province at the Guangdong Provincial Supreme People's Court on 20 December 2019. |
| Year(s) Of Engagement Activity | 2020 |
| Description | University of Leeds Conference on Law, Finance and Development with Chinese Characteristics |
| Form Of Engagement Activity | A formal working group, expert panel or dialogue |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Schools |
| Results and Impact | On 25th June 2019, a major symposium on Law, Finance and Development with Chinese Characteristics, hosted by the School of Law, University of Leeds took place at the School of Oriental and African Studies, London. The purpose of this symposium was to promote the understanding of law and finance in China and to disseminate the interdisciplinary works of the Chinese law project co-funded by the China National Science Foundation and the Economic and Social Research Council (ESRC). Members from the Leeds law school attending the conference included Professor Gerard McCormack, Professor Andrew Keay, Professor Joan Loughrey, Dr. Sarah Brown, Dr. Zinian Zhang, Dr. Chuyi Wei and Dr. Suren Gomtsian. There are five members from the economics and management school, University of Wuhan, including Professor Huang Xian, Professor Pan Min, Dr. Liu Yan, Dr. Hu Ting and Dr. Yu Jingwen. The conference has also brought together other experts in business law, including Professor Simon Deakin from University of Cambridge, our former Leeds colleague Prof Jingchen Zhao and Prof Rebecca Parry from Nottingham Trent University, Dr. Ding Chen from University of Sheffield and Dr. Daoning Zhang from Canterbury Christ Church University. The conference kicked off with a keynote speech on 'Finance and the Rule of Law', given by Professor Deakin, who systematically reviewed the historical evolution of the rule of Law and its complex relationships with the market economy and financial institutions. The keynote speech was followed by 11 research reports, which examined a range of topics on the development of legal rules and financial institutions in China, such as ownership networks in the banking sector, resolution of zombie companies through insolvency law, China's banking sector reform and technology upgrading, Chinese corporate bond defaults, short selling, informal finance, and effects on corporate governance of institutional investors in the Chinese stock market. Following this conference, the Leeds team and Wuhan team will hold another conference in China this year with a view to discussing further and disseminating the policy impact of this project. The Chinese law project has yielded research findings that can significantly contribute to academic discussion and policy-making on the rule of law and internationalisation of the financial system in China. |
| Year(s) Of Engagement Activity | 2019 |