Why China’s judiciary is not so important? Institutional protection of investors in China’s securities markets

Weiping He, Tao Huang

Research output: Chapter in Book/Report/Conference proceedingConference PaperResearch

Abstract

China’s securities markets have been experiencing high growth this year. The Shanghai Stock Exchange is now ranked as the fourth largest stock exchange in the world. So who is protecting Chinese investors in this fast growing and potentially volatile market? The Incomplete Law Theory of Pistor and Xu contends that regulators, as they are more efficient, play a more dominate role than the judiciary in protecting investors in securities markets. This theory to some extent explains why China’s judiciary has been inactive in protecting investors in China, the host of the third largest securities market in the world. However, our paper finds that the theory is not able to adequately explain the investor protection mechanism in China. We find that by deploying various political resources, the Chinese State plays a direct role in protecting the interest of investors that is often more significant than that played by judicial or regulatory authority action.
Original languageEnglish
Title of host publicationThe University of Chicago-Shanghai Jiao Tong University Securities Law Forum
Subtitle of host publicationThe future of securities regulation in the US and China
Pages1-20
Number of pages20
Publication statusPublished - 2015
EventThe University of Chicago-Shanghai Jiao Tong University Securities Law Forum: The future of securities regulation in the US and China - Shanghai, China
Duration: 25 Jun 201526 Jun 2015

Conference

ConferenceThe University of Chicago-Shanghai Jiao Tong University Securities Law Forum
CountryChina
CityShanghai
Period25/06/1526/06/15

Keywords

  • Securities Market Regulation
  • Court
  • Incomplete Law Theory
  • Investor Protection
  • Political Resource

Cite this