In this paper, I explore the institutional context through which Chinese state-owned enterprise’s corporate governance has historically been formed. Especially, I trace the dynamic process of China’s modernization that has made Chinese SOEs’ corporate governance to become the current ‘Danwei system under bureaucratic control’. The first stage of making Chinese SOEs’s corporate governance is the ‘Westernization movement (Yangwu Yundong)’ period, during which China established ‘Government-run enterprises (Guanban Qiye)’, the seed of Chinese SOEs. In the second stage, the Nationalist party (Kuomintang) regime in Nanjing introduced a state-owned, planned economy, the first point when the Chinese government had built up unitary control through SOEs thorough establishment of Danwei system. The third stage is the socialist period during which the bureaucratic control via the planned economy centered on SOEs was distributed across local governments under the policy of administrative decentralization in China. At that time, the policy of ‘Danwei system under bureaucratic control’ had consolidated it’s position as the central style of Chinese SOEs’s corporate governance. In conclusion, the main characteristic of Chinese SOEs’ corporate governance is that it did not simply emerge during the socialist period but had been formed historically by Chinese government thorough the modernization process.