An Insight into the Need for Introducing Legislation for Social Enterprises and the Ecosystem of Social Enterprises in China

The development of social enterprises in China has been underway for many years, but there are as yet no laws regulating them. Even though several local governments or private platforms have issued a few social enterprise certification documents in the past years, it is only confined to the standards for social enterprise certification, and such standards are not identical, one reason is the lack of a superior law, i.e., the gap in the regulation and law at the national level, as well as the absence of legal status for social enterprises. Meanwhile, the rapid growth in the number of social enterprises has raised new demands for the legal recognition of social enterprises. As a result of covid-19, the collapse of the real economy and the rise in unemployment due to the delinking of China’s economy from globalization is also awaiting a breakthrough in the legitimacy of social enterprises to seek a solution. The role played by the Chinese government will also have an impact on the need for social enterprise legal frameworks. The introduction of social enterprise legislation in China, especially the timing of the adoption of this legal framework, cannot be separated from the situation of the development of the local social enterprise ecosystem, which is not isolated and closely related to the Chinese social system, economic development, political environment, and cultural background. This paper employs a literature-based analysis, supplemented by a comparative approach, to explore and analyze the need and timing of the introduction of legislation for social enterprises, with the hope of shedding some light on social enterprise stakeholders, potential investors, legal practitioners, lawmakers, and researchers in other fields.