Piercing the Corporate Veil in China: Where is It Now and Where Is It Heading?

This Paper presents the results of the first comprehensive empirical study of China's cases adjudicated under the statutory veil piercing regime introduced as part of the 2005 corporate law reform. It provides insights into the way Chinese courts have interpreted and applied the veil piercing doctrine, an area of law renowned for its complexity and uncertainty. Some comparisons are drawn between the results of this study and similar studies undertaken in common law jurisdictions, which served as a model for the new Chinese veil-piercing regime. The empirical findings are analyzed in an attempt to answer the question whether and how China's veil-piercing law has fulfilled its stated mission, namely to protect creditors. A number of suggestions are offered with a view to improve its efficacy. The Paper also applies the interest-group theory to explain and project the development of China's veil-piercing rules. The outcome of the research can be of considerable significance, especially to foreign lenders, business partners or investors in Chinese companies. [ABSTRACT FROM AUTHOR]