China has been in great transition since the end of the 1970s. It has gradually moved from a rigid planned economy with public ownership of the means of production toward a socialist market economy. The changes at the firm levels have called for a general reform of the legal system as a whole, with a particular focus on the reform of corporate governance. Chinese commentators' views on the concept of corporate governance have been substantially influenced by corporate governance theories in developed economies. One main objective of this study is to analytically explore cultural, social, institutional, historical, economic and other factors affecting the resulting differences in implementation that have been observed in China. Simply copying from the West without effective implementation and compliance of the standards to appease the international investors is unlikely to work in the long run. When learning from the West in finding appropriate measures, care needs to be taken to understand the background and reasoning to the measures adopted in the West and whether such measures are likely to work in China. China is engaging in selective adaptation of international norms and the success of that exercise depends also on institutional capacity building.