Changing Regulations of Peer-to-Peer Lending in China

摘要

China's P2P lending market now comprises a significant share of global markets in terms of transaction amounts, followed by the US and the UK. This huge market share was strongly driven by huge demand from the underserved borrowers and lenders in the Chinese financial market as well as the widespread adoption of online financing. Nevertheless, recent frauds of P2P lending, such as Ezubao and Esudai, showed vulnerability and risks that might impede the future growth of this industry. This study analyzed the regulatory frameworks of P2P lending in China through the lens of both public and private sectors, including government authorities, industry associations, and CRAs. Nonetheless, the regulatory issues, such as the gap between the regulatory expectation of Interim Measures and business practice in the Chinese P2P lending market, appropriateness of self-regulatory rules for disclosure, as well as the objectiveness of rating reports on rated P2P lending platforms, continue to pose challenges for Chinese policymakers in regulating this industry, which is full of disruptive innovations.