The ownership in China mostly is government or financial institutions as reported before. As a result of that government controls most companies in China when they can use politicians’ connection to control both the market and the firm. However, in well-regulated countries politicians cannot control the firms. In China, family ownership leads to poor performance and reflects conflicts with other shareholders. On the other hand, family ownership in …show more content…
Until 1978, China only has one financial institution, the People’s Bank of China (PBOC). After changing some policies, many banks were established such as the Industrial and Commercial Bank of China (ICBC), the Agricultural Bank of China (ABC), the Bank of China (BOC). Unlike other models Japan and German, banks sector in China play important role in corporate governance. Most of Chinese commercial banks owned by the government, these banks have huge number of nonperforming loans which is a result of poor loan decision and reducing the nonperforming loans for the other banks. Moreover, the Shanghai and Shenzhen stock exchanges were established to make foreign be able to trade in Chinese listed