The General Office of the Communist Party of China Central Committee and the General Office of the State Council issued opinions on improving the “modern enterprise system with Chinese characteristics”, setting objectives over about five years for eligible enterprises to establish the system with strengthened party building, more robust governance structures, more market-based operating mechanisms and higher standards of scientific management, with further enhancement targeted by 2035. The opinions set out governance expectations for state-owned and privately owned enterprises, including clarifying the boundary for party committee discussion and decision-making on major matters, strengthening the role of corporate charters, and defining the respective functions of shareholders’ meetings, boards and management. For state-owned enterprises, the measures include optimising shareholding structures, standardising board authorisation to management, improving evaluation and incentive constraints for external directors and promoting tenure-based and contract-based management. For private enterprises, the document encourages clearer and more transparent ownership structures, standardised articles of association and more formal governance bodies where conditions permit. Capital market-related measures include strengthening controlling shareholders’ integrity duties, supporting listed companies to introduce institutional investors holding 5% or more as active shareholders, strictly implementing the independent director regime, requiring audit committees with a majority of independent directors and an independent director special meeting mechanism, and improving governance-related disclosure. On supervision and implementation, the opinions call for stronger cross-department joint oversight, credit-based differentiated supervision, tighter financial regulation including a “firewall” between industrial and financial capital and consolidated supervision of financial holding companies, and stricter prevention and punishment of corporate financial fraud. Follow-on work includes improving supporting laws and regulations, including promoting revisions to the Enterprise State-owned Assets Law, and strengthening oversight of professional service providers such as accounting, consulting, legal and credit rating firms.
China Securities Regulatory Commission 2025-05-26
General Office of the Communist Party of China Central Committee and General Office of the State Council issue five-year plan to reinforce party leadership and upgrade corporate and listed company governance
The General Office of the Communist Party of China Central Committee and the State Council issued opinions to enhance the "modern enterprise system with Chinese characteristics" over five years, targeting improvements by 2035. The opinions outline governance expectations for state-owned and private enterprises, including optimizing shareholding structures, standardizing board authorizations, and enhancing governance-related disclosures. They also call for stronger cross-department oversight, tighter financial regulation, and stricter prevention of corporate financial fraud.