Recent Development of Fintech Regulation in China: A Focus on the New Regulatory Regime for the P2P Lending (Loan-Based Crowdfunding) Market
Capital Markets Law Journal, Volume 13, Issue 1, 1 January 2018, Pages 85–115
31 Pages Posted: 16 Feb 2018
Date Written: October 1, 2016
FinTech innovation has thrived in China in the past decade. As one leading sector of FinTech innovation, the P2P lending market has experienced an unparalleled growth in China with the Chinese market acceding to be the largest market in the world. This rapid development, while it satisfies the financing need, has brought about industrial risks and regulatory challenges. This article starts with an empirical survey of the explosive development of the P2P lending industry in China followed by an examination of its underlying economic, institutional and technological driving forces. The second part of this article then turns to inspecting, comparatively, several features of regulatory approaches as adopted by the newly established regulatory regime. The third part interrogates two critical challenges which have not been resolved by the new regulatory regimes. The final part concludes.
The tentative conclusion is that the newly established regime is a welcome regulatory development. Not only has it provided comprehensive legal protection for participants of the P2P lending market in China; it may also contribute a new model to the global regulatory map for the sustainable growth of the P2P lending market, and the FinTech industry in general.
Keywords: Financial innovation, FinTech regulation, P2P lending, Loan-based crowdfunding, Regulatory responses, Information disclosure
JEL Classification: G18, G28, K22,O16
Suggested Citation: Suggested Citation