Due to the lack of purpose-built provisions in pre-incorporation contract under China's Company Law, the judicial practice in this area of law in that country has been in a state of flux for a long time. The best way of ending this unsatisfactory state of affairs is to enact a pre-registration transaction regime. The purpose of this article is to reveal the most efficient rules on pre-incorporation transaction through an economic analysis of default rules. The conclusion that this research has reached is that the optimal rule on pre-incorporation mcontracts under China's current company system is the "personal (i.e., the promoter's) liability rule