• May 2015
Tian Bowen, "Collective Action Dilemmas in Technical Standardization: Learning from the Internet of Things Industry," Working Paper #39, May 2015. Full Text (全文)
Abstract: Through a case study of standardization in China's Internet of Things industry, this paper seeks to reveal the logic of collective action and suggest possible ways to solve collective action dilemmas. It finds that, Chinese standardization is an institution-driven process, and the whole process embodies the characteristic of "techno-nationalism." It follows the pattern "from top to bottom, from abroad to domestic,” by relying heavily on the role played by universities and research institutes in technical standardization. However, it weakens the role of the market mechanism and enterprises. The difficulties of developing standards through formal, government-backed process are as follows: 1) factors such as inefficiency (for instance, the speed of standard development and the quality of standard content), cost and the lack of continuous support from senior management disincentivize organizations’ participation in the development of standards; 2) the increasing number of SDO participants and the heterogeneity of type and ability have generated coordination costs and a free-rider problem, which leads to inefficient participation and limited contribution to the development of standards. The heterogeneity causes dilemmas in the process of standard development and the subsequent process of standard diffusion; and 3) the low number of participating enterprises and the high degree of uncertainties leads to fewer standard adoptions and slow diffusion. This paper suggests the following ways to solve the dilemmas of collective action by standard-setting organizations: 1) strengthen the willingness of participants to adopt the standardization process by using forum publicity and IT tools; 2) reduce or eliminate the free-rider problem by using scoping decisions, multilayer funding structures and selective standards; 3) promote standards by using the strategy of starting from the abroad and diffusing to the domestic and to demonstration stations; and 4) increase the positive and important role played by Secretariat in the standardization process.
• April 2015
Zhang Xingxiang, "Feeling the Rhythm of China's Legal Transformation: My Experience in Government and Business in China," Working Paper #38, April 2015. Full Text (全文)
Editor's Note: This paper is an autobiographical account of the exciting career of Zhang Xingxiang (张兴祥), the RCCPB's inaugural Practitioner-in-Residence.
From 1997 to 2004, Dr. Zhang worked in the State Council's Legislative Affairs Office. After receiving his LLM from Yale in 2005 and his doctorate in law from China University of Politics & Law in 2006, he spent the next nine years of his life working for the American multinational General Electric (China). He originally was responsible for GE's government policy work vis-a-vis the Chinese central government. He later shifted to direct legal and compliance affairs for Yingda International Leasing, a joint venture between GE and the State Grid. He left Yingda and GE in August 2014 in order to join the RCCPB for the current academic year.
A core ethos of the RCCPB is to build bridges between academia, industry, and government. Our research projects and events typically include experts from all three groups, as we believe it is important that our research be not only of the highest academic quality but directly relevant for policymakers and the business community. That is why we launched the Practitioners-in-Residence program and why we are so enthusiastic about Dr. Zhang joining our community. Without his joining the RCCPB, this paper would not have been possible.
Dr. Zhang provides us a path-breaking personal window into the usually hidden life of government officials and lobbyists in China. His experience working in and outside of the Chinese government makes his description and analysis of both even more valuable. Although the secondary literature on this area, to which I have contributed, is growing, scholarly articles cannot convey the rich texture of what life is like for the participants in this process. In many ways, this essay is similar to the autobiographical sketches that are found in Sang Ye's, China Candid: The People of the People's Republic (University of California Press, 2006). Dr. Zhang lifts that veil for us, and reveals a complex world with a wide variety of individuals whose views and actions are shaped by their personalities, family background, education, personal networks, and employer. As such, we see a China that is more nuanced and varied than the typical stereotypes. Government officials are not simply condescending power brokers, and being successful in business is not simply about currying favor with a select group of patrons. There is much, much more going on.
To ensure that we are sharing Dr. Zhang's authentic voice, we have only edited lightly for grammar and have not checked any of the data or other information for accuracy. The RCCPB is indebted to Dr. Zhang for sharing his experiences and perspective with us.
Zhang Xingxiang, "China's Anti-Monopoly Law Enforcement: a Quest for Transparency, Consistency, and Fairness," Working Paper #37, April 2015. Full Text (全文)
Abstract: This paper analyzes inconsistent enforcement issues by reviewing aspects of China’s anti-monopoly law (AML) enforcement practice based on a case information sample covering 80% of undertakings under AML probes and punishment.
Section 1 identifies the issue of defining undertaking and sales revenue and determining jurisdiction. Section 2 summarizes the factors affecting penalty amounts. Section 3 lists several types of unequal treatment for similar monopoly offences. Section 4 explores four ways to restrict the exercise of discretionary power: fine guidelines to unify the exercise of fining practice, transparency to facilitate pubic monitoring, right to a hearing for safeguarding targeted companies’ interests; and the provision of reason to improve the fairness of a decision. Unfortunately, all of these practices are all currently employed to an unsatisfactory degree.
To ensure that the AML may be implemented fairly, equally and transparently, the paper provides policy suggestions at the end of each section after issues have been analysed and identified. The main policy proposals are as follows:
- issue rules to clarify and unify the meaning of key legal terms, such as undertaking, sales revenue, etc.;
- strictly enforce the AML to disgorge the illegal gains from the lawbreakers;
- publish and enforce objective, measurable, and workable fine guidelines to specify aggregating, attenuating, and immunity circumstances and how those factors should be weighted;
- all enforcement decisions should be publicized unless there are prevailing legitimate interests to protect confidential information;
- an enforcement agency should be required to hold a hearing before imposing a fine higher than one million RMB, and hearing result should have a binding effect on enforcement decisions; and
- enforcement agencies should provide detailed competition analysis, and provide reasons in the enforcement decisions.
• October 2014
Deng Xinming, “Chinese Consumers’ Ethical Consumption: Between Intent and Behavior," Working Paper #36, October 2014. Full Text (全文)
Abstract: Consumers' ethical shopping behavior isvery complicated. There is an apparent gap between intent and actual behavior. Through two approaches the paper analyzes the factors preventing consumers from translating their stated ethical intentions into actual ethical buying behavior. The first type of data draws on in-depth interviews and identifies 6 personal consumerand 5 shopping situational factors impeding the transformation from consumer’s stated ethical intentions into actual ethical behavior. The second dataset is based on questionnaires from 1,000 consumers to test the adaptability of those personal and situational factors identified in the interview data, andinvestigates the moderating effects of these factors on the relationship between intentions and behavior. The findings show that among those personal factors, moral maturity, economic rationality, buying inertia, cynicism, and ethical cognitive efforts all have a significant moderating role on the relationship between ethical intentions and action. All of the situational factors moderate the relationship between intention and action. Finally, the paper develops an overall theoretic framework for consumers’ ethical decision-making process, which can provide insight into how to motivate consumers to support a firm’s ethical behavior and to transfer this kind of support into truly positive purchasing behavior.
• August 2014
Dilip K. Das, “China’s Outbound Foreign Direct Investment: Sources of Growth and Transformation,” Indiana University Research Center for Chinese Politics & Business, Working Paper #35, August 2014. Full Text (全文)
Abstract: The Chinese economy is in the middle of a transformation from an economy that was a recipient of the second largest amount of foreign direction investment (FDI) in the world after the US to one that has started making enormous amounts of outward FDI. In 2012 it was the third largest source of OFDI after the US and Japan. This article traces the path of China emerging into a large OFDI-making economy. By some measures China’s OFDI has grown larger than some of the traditional OFDI-making economies. It examines China’s OFDI trajectory and its shifting pattern, its points of inflection, and the domestic and global drivers of this transformation.
Although it started in a subdued manner, commercially and geographically China’s OFDI has reached significant levels. During the new millennium, since the adoption of the “go global” strategy by the government, both qualitative and quantitative changes in OFDI flows have become apparent. There are some specific factors that helped China in its rapid OFDI spurt, such as China’s conscious attempts to integrate regionally and globally, its participation in global value chains as well as the global financial crisis. The government has played a decisive role in the expansion of Chinese OFDI. An overwhelming proportion of large mergers and acquisitions have been made by state-owned enterprises (SOE). Although initially the involvement of private sector MNCs and business enterprises in OFDI was restrained, during recent years they have picked up enormous momentum. As Chinese companies are relatively new to ODFI, they suffer from some limitations. There can be few hastily contrived remedies to alleviate these systemic weaknesses.
• January 2014
Jui-Chien Cheng, “Challenges Surrounding Directors’ Duty of Care in Chinese Corporate Law,” Indiana University Research Center for Chinese Politics & Business, Working Paper #34, January 2014. Full Text (全文)
Abstract: The concept of fiduciary duty, derived from common law, was introduced to the Company Law of the People’s Republic of China in 2005. Even so, few fiduciary lawsuits have been brought to the courts of China since 2005. There are three main reasons for the rarity of fiduciary lawsuits. First, Chinese fiduciary law has neither clear content nor a clear standard of review. Second, the traditionally harmonious culture of China discourages filing lawsuits against directors. Third, Chinese law imposes severe restrictions on derivative lawsuits. This paper presents a detailed description of the regulation of the duty of care in China. The difficulties facing the fiduciary duty in China are examined in light of the history and status quo of the duty of care in Delaware, the outcome of the leading Chinese case regarding the duty of care, the severe restrictions on derivative lawsuits in China, and the influence of China’s social and cultural values.