TY  - JOUR
AU  - Allen, William T
AU  - Shen, Han
TI  - Assessing China's Top-Down Securities Markets
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 16713
PY  - 2011
Y2  - January 2011
DO  - 10.3386/w16713
UR  - http://www.nber.org/papers/w16713
L1  - http://www.nber.org/papers/w16713.pdf
N1  - Author contact info:
William Allen
William T. Allen
New York University School of Law
40 Washington Square South
New York, NY 10012-1099
212-998-6327 (Phone)
United States
E-Mail: wtallen@wlrk.com

Han Shen
Davis Polk & Wardwell LLP
3A Chater Road, Central
Hong Kong
E-Mail: shenhan@gmail.com
M1  - published as William T. Allen, Han Shen. "Assessing China's Top-Down Securities Markets," in Joseph P. H. Fan and Randall Morck, editors, "Capitalizing China" University of Chicago Press (2013)

M3  - presented at "Capitalizing China Conference", December 15-16, 2009
AB  - China's securities markets are unlike those of Amsterdam, London or New York. Those markets evolved over centuries from myriad interactions among those seeking finance on the one hand and savers seeking rewarding investments on the other. Such spontaneous securities markets did emerge throughout China in the 1980s following the start of economic liberalization, but these spontaneous markets were closed by the government in favor of new and tightly controlled exchanges established in the early 1990s in Shanghai and Shenzhen. These new markets, have been designed to and largely limited to, serving state purposes, that is to assist in the financing of the state sector of the economy. Rather than evolving in a bottom-up pattern, they are controlled, top-down securities markets. This essay reviews as of June 2010, the development of these markets, the economic functions they perform, the regulatory structure that controls and shapes them, and the governance mechanisms - legal and otherwise - that controls the management of the PRC listed companies. These markets represent a signal accomplishment of the Chinese leadership in producing in less than twenty years' modern, albeit not yet fully developed, securities markets. Whether they can be further developed to serve more basic economic role than they have been permitted to play is a question with which the essay concludes.
ER  -