Everybody knows that China has a problem with transparency, corruption, clarity in ownership, etc... the IMD World Competitiveness Yearbook for 2005 rated Chine 54 out of 60 (54/60) for ethical practices; 56/60 for credibility of managers; 54/60 for Corporate Boards; 45/60 for social responsibility; 59/60 for auditing and accounting practices; 42/60 for health, safety and environment; and 60/60 for shareholder value. This means a big issue of trust: trust by employees, by the public, by investors... Will China face up to its governance problem ? The issues are described in an interesting article by William Fischer, IMD proffessor, published in the June 2, 2005 issue of the Financial Times. So who will be able to pressure China into changing ? Probalby many people - investors divesting (Harvard University just dumped its stakeholding in a large quoted company), people complaining on the ground. Good employees looking for employment elsewhere... The pressure will be on, but who knows how long it will take for China to change.
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