Funds Sharing Regulation in the Context of the Sharing Economy: Understanding the Logic of China’s P2P Lending Regulation

(2019) Computer Law and Security Review

17 Pages Posted: 15 Jan 2019

See all articles by Tao Yu

Tao Yu

Southeast University

Shen Wei

Shanghai Jiao Tong University Law School

Date Written: January 4, 2019


“Sharing economy” is an umbrella term that encompasses a wide range of digital platform-based activities that includes P2P lending and other forms of internet-based lending. The core aim of the sharing economy is to leverage the utilization of idle capacity. P2P lending can not only be used to leverage small amounts of money on the lender’s side, but also be used to promote financial democracy and inclusion both on the lender and borrower’s sides. P2P lending regulation, therefore, should place an emphasis on the utilization of dead money and promotion of financial democracy. This article scrutinizes the regulation of P2P lending in China. The existing regulatory system for P2P lending in China is built upon rules and regulations that have been designed solely with traditional brokers in mind. The article contends that the rigid rules placed on lending platforms limited their ability to maintain their roles as brokers and, in turn, heavily endangered the commercial sustainability of P2P platforms, thereby harming the sharing economy’s openness and inclusivity. Additionally, the article argues that the fact that there is no limit on the amount a lender can invest poses a threat to the notions of leveraging idle money and financial inclusivity. The closed-ended P2P lending regime in China would cause some chilling effects to financial innovation in the P2P lending industry, and in a wider sense, the rising FinTech sector. Regulators in China need to cope with these challenges in a flexible but pragmatic manner, and particularly make use of the benefits the sharing economy may bring to the Chinese economy more broadly.

Keywords: Sharing Economy, P2P Lending, Financial Regulation, Financial Democracy

Suggested Citation

Yu, Tao and Wei, Shen, Funds Sharing Regulation in the Context of the Sharing Economy: Understanding the Logic of China’s P2P Lending Regulation (January 4, 2019). (2019) Computer Law and Security Review, Available at SSRN: or

Tao Yu

Southeast University

Sipailou 2#
Nanjing, Jiangsu Province 210096

Shen Wei (Contact Author)

Shanghai Jiao Tong University Law School ( email )

No.1954 Huashan Road
Shanghai, Shandong 200030

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