Why corporate disputes in China still revolve around rubber stamps

CHINA IS IN the vanguard of new technology, from facial recognition to 5G networks. Many Chinese firms, though, rely on something from an earlier age: a hard, usually rubber chop with a firm’s name engraved on it, to be dipped in crimson ink and stamped on important documents. Chopping is seen as more authoritative than a mere signature. The 2,000-year-old tradition may seem quaint. But in China, who controls the chop controls the company.

Consider three ongoing kerfuffles. On June 4th the board of Arm China, the Chinese joint venture of a chip designer owned by Japan’s SoftBank, voted to remove its boss, Allen Wu. Just one snag: Mr Wu refused to go. Because he still holds the chop, he has continued to act in Arm China’s name, and threatened legal actions to defend his position. A week later Bitmain, which makes bitcoin-mining computers, announced that it had replaced its old chop with a new one. They looked virtually identical—Bitmain’s Chinese name in a red circle around a star—except for a new serial number. But it was enough to indicate that one of the feuding co-founders, Micree Zhan, now has the upper hand.

The oddest recent chop bust-up occurred in April. Li Guoqing, the ousted co-founder of Dangdang, a once-popular e-commerce platform, broke into its headquarters and, in a bid to retake the company, removed...



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