Wait-and-See or Whack-a-Mole: What Is the Best Way to Regulate Fintech in China?

Abstract

Chinese fintech, initially taking the form as “Internet finance,” is growing rapidly and poses great challenges to its financial regulatory authorities. Acclaimed as a new financial innovation, Internet finance was once accepted and even welcomed by the normally conservative Chinese financial regulators, who simultaneously adopted a wait-and-see strategy, to encourage such innovation and avoid overwhelming regulation. The benevolent regulation stance, however, bred rampant Ponzi schemes or fake financial innovation, resulting in tremendous monetary losses among lots of investors. To show a quick and active response, the central government popped into a whack-a-mole game, starting a four-year campaign of strict Internet finance regulation that has even cracked down on all the P2P lending platforms. This article analyzes the regulatory policy updates of Chinese Internet finance that is transforming to certain kinds of lawful fintech with difficulties, and that adaptive regulatory-organization restructure, regulatory-system optimization, and regulatory-model innovation would be more effective and constructive regulatory options.

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“…Technological improvements, on the other hand, will undoubtedly continue to raise new and difficult concerns. 84 Every innovation brings with it a head-on collision with current legal systems around the world. 85 Instead of astonishment and enthusiasm, our legislative and regulatory reactions to technological innovations typically portray apprehension and irrationality.…”

“…Firearms are more common in higher-income nations. While obtaining a 3D printer is still extremely costly, firearms would most probably be manufactured in wealthy nations, that 84 Cosans, J. (2014) Between Firearm Regulation and Information Censorship: Analyzing First Amendment Concerns Facing the World's First 3-D Printed Plastic Gun.…”

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“… The Legitimacy of Global Social Indicators: Reconfiguring Authority, Accountability and Accuracy. Les Cahiers de Droit, 59 (1), p. 44 158. Thierer, A.D. and Marcus, A.…”