The Emergence of Social Enterprises in China: The Quest for Space and Legitimacy

Abstract

In recent years, the mainland Chinese government has encouraged the development of the nonprofit sector in China. This development has been accompanied by the emergence of the “social enterprise” as a concept in China. Despite its novelty, there has been increasing recognition of the potential for social enterprises to tackle social problems such as unemployment, discrimination and low income.

This article reviews the emergence of the social enterprise as a new social entity in China, examines its vaguely defined legal status, and explores deficiencies in the relevant legal frameworks. The author recommends the introduction of a distinct category of organizational structure for social enterprises, to rectify some of the existing inadequacies in social enterprise law. These changes in turn will modernize the legal and regulatory framework for social enterprises in China. It is hoped that such measures will facilitate regulations of social enterprises and support a stronger, more sustainable and more socially inclusive economy.