The chapter examines the corporate governance institutions that developed during the Legal Modernization Era. It analyzes the traditional corporate governance mechanisms, both internal and external to the firm, that were embraced in China and adapted to domestic political–economic circumstances. The chapter discusses how China’s superficially convergent, investor-oriented corporate governance framework actually diverged in practice. It illuminates the political functions of law, showing how the corporate governance framework was ultimately directed to support the reconsolidation of political–economic powers and the shift toward state capitalism. The chapter offers comparative insights drawn from alternative systems of corporate governance and analyzes the implications of the Chinese framework for investors in the Chinese market.