This article sets out to investigate the law and the development of the corporation and corporate governance in the People's Republic of China. The evolution of the corporate system in China happens in the context of the economic reforms, which started in the late 1970s and are in full swing currently. This occasions the greatest significance to the discussion of this topic. This article attempts to carry out a research that sets out to answer the following questions: How are the Chinese going to shape their corporate governance system? Has the corporate governance system been influenced and will it be influenced by any existing corporate governance theories and practice? How should a practical corporate governance system with Chinese characteristics evolve? What kind of corporate governance model is practicable for China? In doing so, this article firstly examines the reception and development of the theory and practice of the corporation and corporate governance in China. Then, it proceeds to discuss why and how the Chinese apply corporate mechanisms to reform their state-owned enterprises. Finally, it attempts to put forward an opinion about a rational system of corporate governance in China, as well as to speculate on the future development of the corporate system in China.