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Book Chapter

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Corporate governance reform has become a topic of considerable debate both in the US and in many emerging markets. Indeed, the discussion is important because these reforms may have potentially long-standing effects upon the global allocation of capital, and in understanding the ways in which governance norms are communicated across markets and nations in an ever-globalizing world. In this chapter we examine the corporate governance reform efforts of the world's two biggest and fastest growing emerging markets, the People's Republic of China (PRC or China) and India. In the process we find that our understanding of how and why corporate governance reform comes about, where it leads, and what value it has can vary significantly, but still shares some commonalities that are of considerable theoretical and practical importance. The inquiry commenced in this chapter is inspired by certain key facts. First, China and India are growing at a remarkable and unprecedented pace and seem to have survived the 2008-9 Global Financial Crisis better than most other economies. Second, China and India are not Western countries, but have been heavily influenced by "globalized" Anglo-American notions of corporate law, corporate governance norms, and securities regulation. Third, China and India are presently two of the most popular destinations·for foreign capital in the world - whether via foreign direct investment (FDI) in essentially private (or pre-public) transactions or public capital markets transactions. Fourth, both India and China have undergone, and are progressing through, incredibly important (indeed world -changing) programs of economic reform and restructuring. At the same time they are increasingly - in the Chinese phrase - "opening to the outside world." These are the shared "facts" of our inquiry, which of course are met by many deep differences, in particular relating to the history, internal organization and political and economic structures of the two great nation­civilizations. However, we believe that the common "facts" recited above - rapid economic development, significant private and public foreign investment, economic, structural and legal/regulatory reform, speedy recovery from the Global Financial Crisis, and a shared interest in (if not implementation of) in essentially Anglo-American corporate law norms -provide an interesting and rich platform for consideration of popular or contested corporate governance and corporate governance reform precepts.