The article ‘China’s “Corporatization Without Privatization” and the Late 19th Century Roots of a Stubborn Path Dependency’ analyzes the contemporary program of ‘corporatization without privatization’ in the People’s Republic of China (PRC) as visited upon China’s traditional state-owned enterprises, but through an in-depth consideration of precursor enterprise establishments—starting from the late Qing dynasty’s creation of ‘government-promoted/-supervised, merchant-financed/-operated’ (guandu shangban) firms in the latter part of the 19th century and proceeding to early 20th century (former) official-promoted, but not family-based, firm groups like Zhang Jian’s Nantong and Shanghai-based Da Sheng group.

While many analysts are tempted to see the contemporary PRC corporations that dominate the world economy and global capital markets as partial confirmation of convergence theory, this article argues that such apparently modern firms show unique path dependencies rooted in the Chinese experience prior to the fall of China’s last imperial dynasty in 1911. To that end, this article identifies a host of commonalities between China’s large-scale imperial court-promoted or court-operated enterprises after 1870 and the PRC’s largest corporations and corporate groups that have developed since the early 1990s. These commonalities touch on the national development ambitions behind such firm establishments, public and private financing mechanisms, the promise of preferred investor returns, operations, monopoly franchise rights, firm and group internal corporate governance, relationship to law and domestic and transnational legal systems, the interaction between the state and other non-state sectors, and more.

At the same time, the article investigates key differences in the surrounding geopolitical, political, legal, economic, and market environments between the late 19th century and today, so as to explain the ways in which today’s Chinese enterprises and enterprise groups are, and will be, distinct from their 19th century ancestors. The article aims to help policy makers, global capital markets participants, and corporate governance theorists understand more concretely the underlying differences between modern China’s apparently convergent corporations, on one side, and corporate enterprises operating and financed in other parts of the world, all to illuminate the future distinct trajectory of the PRC and its rising corporate entities as global political and economic actors of abiding power and influence.

Nicholas Calcina Howson is a professor of law at the University of Michigan Law School.