Concerns about the corporate governance of Chinese companies are not new, particularly where foreign investors are concerned. Many of the basic tenets of good corporate governance are well established for western companies, but have been more difficult to spin into the fabric of Chinese commerce. That said, in China, and elsewhere in Asia, for all the well-documented problems surrounding lack of transparency and accountability of leadership, several of the largest companies are displaying a growing appreciation of just how vital good corporate practices can be. These corporate governance successes are, however, more an exception than a rule and progress is needed on a broader scale.
According to Fitch Ratings, information flow and difficulties contacting Chinese companies after bond deals close is dampening investment appetite from international investors. Worries about financial disclosure and corporate governance also abound.
Fitch says that while it expects investment interest to remain strong in 2013, these shortcomings might dampen global investors’ interest in Chinese corporate debt, even as Chinese corporate appetite for international debt issuance continues to grow through 2013.