Davis Polk & Wardwell LLP
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Institutional Affiliation: Davis Polk & Wardwell, Hong Kong
NBER Working Papers and Publications
|November 2012||Assessing China's Top-Down Securities Markets|
with William T. Allen
in Capitalizing China, Joseph P. H. Fan and Randall Morck, editors
This chapter analyzes China's securities markets both in terms of their size and composition, and in terms of their economic function and importance to the Chinese economy. In so doing, it assesses the regulatory regime within which these markets function and the corporate governance mechanisms that operate upon the firms listed on the Chinese stock exchanges. The chapter concludes with observations concerning the fundamental contradiction between the Chinese securities markets' top-down design and control on the one hand and, on the other, their possible effectiveness in efficient capital allocation, risk management, and as a tool of discipline.
|January 2011||Assessing China's Top-Down Securities Markets|
with William T. Allen: w16713
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 revi...