ASLI Working Paper Series

Publication Title Legal Development in China’s Securities Market during Three Decades of Reform and Opening-up
Publisher Asian Law Institute
Series WPS005
Publication Date Aug 2009
Author/Speaker Chen Daisong
The policy of reform and liberalization which began in the 1970s triggered the transformation of the Chinese economy from a planned economy to a market economy. At a macro-level, an urgent need for reform of the financial system to correspond with the reform which had taken place in the economic system arose. At a micro-level, there was a need for enterprise to develop, and with this came the problem of creating new fundraising channels and changing how things are run. China’s securities markets began to grow in strength, and developed regional, national, and even international prominence, promoting economic development and improving resource allocation. At the same time, the securities market stimulated the introduction of related laws. The introduction of such laws, and in particular the construction of a legal framework to regulate the securities market, flowed from initial efforts to develop such a framework holistically.

Looking back, the thirty years of development of the Chinese securities market since the period of reform and liberalization can generally be divided into four stages: the embryonic stage; the initial stage; the stage of consolidation and adjustment; and the stage of accelerated development, with the rule of law in terms of the securities market deepening all the time. Laws such as Company Law, Securities Law, administrative rules and other regulatory documents were introduced one by one; uniform regulations and self-regulation were harmonized; and investigation into criminal responsibility, together with the provision of relief to victims, was achieved. The basic framework of the rule of law was created, extending from prevention to sanctions, encouraging the growth of the securities market.
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