As China's economic reforms have progressed, however, the need for a company law has become apparent. The two principal reasons are, first, the need to reform existing state-owned enterprises and, second, the need to create a means for foreign investment in reformed state-owned enterprises. For political reasons, there appears to be no perceived need for the company law to encourage larger privately-owned enterprises.
Preston M. Torbert,
China's Evolving Company Legislation: A Status Report,
Nw. J. Int'l L. & Bus.