Dancing with Wolves: Regulation and Deregulation of Foreign Investment in China's Stock Market

Abstract

This paper discusses the regulation of foreign investment in China's stock market. It starts with the development of financial markets in China, followed by a detailed introduction to the evolution of China's stock market and the regulatory regime. It then introduces the forms of foreign participation in China's stock market. It critically analyses the legal traps faced by foreign investors in the Chinese stock market, including the burdensome and ambiguous regulatory culture, markt frauds associated with the SOE reform, poor corporate governance, and the absence of effective judicial protection. It finally puts forward some reform recommendations.

Keywords: financial markets, stock market, foreign investment, regulation and deregulation

JEL Classification: G20, G34, K22