Regulatory experimentation in China’s Peer-To-Peer lending market

Zhou Qin, Xiao Shanyun

Research output: Contribution to journalArticlepeer-review

Abstract

The dramatic ups and downs of China’s peer-to-peer (P2P) lending market have attracted global attention. Most discussion revolves around the necessity and appropriateness of China’s regulation of the P2P market. However, the logic behind the changes of the regulation has not been fully discovered. This article aims to fill this gap by applying regulatory experimentation theory to interpret the process of regulating the P2P lending market in China. It first overviews the development of China’s P2P lending market by identifying two market milestones. It then divides regulatory experimentation on China’s P2P lending market into three phases—the “unregulated” period (before 2015), “adaptive regulation” period (2015-2017), and “aggressive regulation” period (after 2017) — based on the regulatory approaches adopted by Chinese regulators. This article finds that regulators gradually shifted from relying on “substantive” regulatory tools to “procedural” ones. It argues that the changes in the regulatory approaches of P2P lending are thought to reflect the trade-off between protecting the economic interests brought by financial innovation and protecting the social stability.

Original languageEnglish
Pages (from-to)59-93
Number of pages35
JournalTsinghua China Law Review
Volume15
Issue number1
Publication statusPublished - 2022

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