Abstract

This report introduces the institutional setting of China in light of its recent structural reforms that aim to create a more market-oriented economy in the country. In particular, this report explores the distinctive features of state capitalism in China and its reforms over the last few decades. The literature survey provided in this report highlights the market segmentation of Chinese listed firms based on ownership (i.e., SOEs and NSOEs). It also identifies three types of audit firms that provide audit services for these firms (i.e., the international Big 4 audit firms, the domestic Big 6 Chinese audit firms and other small domestic audit firms). Lastly, the survey highlights how market development differences across China’s 31 provinces.