Luckin Coffee: A Look at Corporate Governance in the Chinese Market

The Luckin Coffee case presents an opportunity for an important analysis of corporate governance challenges of Chinese businesses and regulators because of the 2020 scandal and the fact that it carries on business in China and is a publicly traded company in the US. In the past, company failures have led to local and sometimes global queries about the processes through which companies' objectives are set and pursued. The regulatory changes ensuing from corporate scandals can be far-reaching, controversial, and leading to global regulatory contagion. In the Luckin scandal, its real and potential implications involved two of the world's dominant economies. The concerns from the Luckin scandal are the issues on which this chapter is focused. The chapter explores the concepts and regulatory solutions that are relevant to the Luckin scandal. The dynamics of the Chinese market and the consequences of the scandal are explored in the chapter. Ultimately, the need for caution in the discourse on regulatory response to scandals such as the Luckin case is articulated in the chapter.